Schwab Annuity Portfolios DEF 14A Definitive proxy

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of

the Securities Exchange Act of 1934 (Amendment No. )

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Check the appropriate box:

Preliminary Proxy Statement

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Definitive Proxy Statement

Definitive Additional Materials

Soliciting Material Pursuant to §240.14a-12

Schwab Annuity Portfolios

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Payment of Filing Fee (Check the appropriate box):

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Schwab Annuity Portfolios

Shareholder Proxy

March 16, 2022

Dear Variable Contract Owner,

Our records indicate that you are an owner of a variable annuity contract and/or a variable life insurance policy (collectively, “variable contracts”) and that you have selected as an investment option within that variable contract one or more portfolios (each, a “Fund” and collectively, the “Funds”) of Schwab Annuity Portfolios (the “Trust”). As such, you are entitled to give the insurance company issuing your variable contract voting instructions regarding an important matter to be voted upon at an upcoming meeting of shareholders of the Funds. The Trust will hold a Special Meeting of Shareholders virtually on June 1, 2022, at 9:00 a.m. Pacific Time at https://www.viewproxy.com/schwab/broadridgevsm/. Please read the enclosed material and return your voting instruction card as soon as possible.

Shareholders of all Funds are being asked to elect trustees. The trustees of the Trust believe this proposal is in the best interests of the shareholders, and we recommend a vote FOR each of the nominees.

Shares of the Trust and its Funds are held by certain participating life insurance companies (“Insurance Companies”) in separate accounts established for the purpose of funding variable contracts. The Insurance Companies and their separate accounts and not the individual variable contract owners (“variable contract owners”) are the “shareholders” of the Trust and its Funds. The Insurance Companies will offer to variable contract owners that have allocated their variable contract values to the Trust and its Funds (“Affected Contract Owners”) the opportunity to instruct the Insurance Companies as to how they should vote Trust shares held by the Insurance Companies with respect to the proposals to be considered at the meeting.

Your vote is important regardless of the number of shares attributable to your account. Your prompt response will help reduce proxy costs – which are paid for by the Funds and their shareholders – and also will mean that you can avoid receiving follow-up phone calls or mailings.

Thank you for your attention to this important matter.

Sincerely,

/s/ Walter W. Bettinger II

WALTER W. BETTINGER II
CHAIRMAN

IMPORTANT INFORMATION

The following “Questions and Answers” is a summary of important information relating to the special meeting of shareholders and is not intended to be as detailed as discussions included later in the proxy materials. Accordingly, the information in this section is qualified in its entirety by reference to the remaining proxy materials.

What are shareholders voting on?

The Board of Trustees (the “Board”) is asking you to vote on the election of ten members to the Board of Trustees of Schwab Annuity Portfolios (the “Trust,” and together with The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Strategic Trust and Laudus Trust, the “Schwab Funds and ETFs” or the “Trusts”).

Why am I being asked to elect trustees?

The Board is seeking to fill two vacancies on the Board. While the Board may fill vacancies, it may only do so under applicable law, if, after filling a vacancy, at least two-thirds of the trustees were elected by shareholders. Because the Board may not appoint the two additional proposed trustees described herein and meet this requirement, the Board has determined that it is appropriate to hold an election at this time. Separately, the Boards of Trustees of the Schwab Funds and ETFs, which are all advised by Charles Schwab Investment Management, Inc., dba Schwab Asset Management™ are proposing to elect the same trustees. By having this election, we will be able to continue consolidated board oversight of all of the funds in the Schwab Funds and ETFs and manage them more efficiently. Shares of the Trust and its funds (the “Funds”) are held by certain participating life insurance companies (“Insurance Companies”) in separate accounts established for the purpose of funding variable annuity contracts and variable life insurance policies (“variable contracts”). While the Insurance Companies and their separate accounts, as the record holders of a Fund’s shares, are, in most cases, the true “shareholders” of the Funds, holders of variable contracts generally have the right to instruct the Insurance Company that issued the variable contract on how to vote proposals related to the Funds.

What vote is required to approve the proposal?

Shareholders of all Funds within the Trust will vote together for the election of the trustees of the Trust. To be elected as a trustee of the Trust, each nominee must receive the affirmative vote of the holders of a plurality of shares cast.

How do I vote?

Variable contract owners can instruct their Insurance Company, through which they hold a beneficial ownership in a Fund, as to how to vote in one of the following ways:

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by internet, by going to www.proxyvote.com and following the instructions,

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by telephone, by calling the toll-free number listed on your voting instruction card and following the instructions, or

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by mail, by signing and returning the enclosed voting instruction card in the enclosed business reply envelope.

We encourage you to vote over the Internet or by telephone, following the instructions that appear on your voting instruction card(s). Using these voting methods will help reduce the time and costs associated with this proxy solicitation.

We are sensitive to the health and travel concerns that our shareholders may have and the protocols that federal, state and local governments have imposed. We believe that a virtual shareholder meeting provides greater access to those who may want to attend and that offering a virtual only meeting will help to support the health and well-being of our shareholders. Therefore, we have chosen to conduct a virtual meeting rather than an in-person meeting. Shareholders of the Funds can register for the meeting at https://www.viewproxy.com/schwab/broadridgevsm/. Once a shareholder registers, the shareholder will receive an email with a link to the meeting and a control number needed to join the meeting. Shareholders will be able to listen to the meeting live, submit questions and vote online.

Does my vote make a difference?

Yes. To take action on the proposal to elect trustees, a quorum (thirty-three and one-third percent (33 1∕3%) of shares present in person or represented by proxy and entitled to vote at the meeting) must be present in person or by proxy. Even if you have very few shares, you help the Funds receive enough votes to act on the proposal by casting your vote as soon as possible. By voting early, you help the Funds avoid the expense of sending additional mailings to try to get shareholders to cast more votes – a process that is costly to the Funds and to shareholders.

Whom do I call if I have questions?

We will be happy to answer any questions you may have about the proxy materials or upcoming special meeting. Please call 1-855-976-3331 Monday through Friday between 9:00 a.m. and 10:00 p.m. Eastern Time.

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NOTICE OF SPECIAL MEETING OF SHAREHOLDERS

SCHWAB ANNUITY PORTFOLIOS

A special meeting of shareholders of all funds (the “Funds”) in Schwab Annuity Portfolios (the “Trust”) will be held virtually on June 1, 2022, at 9:00 a.m. Pacific Time at https://www.viewproxy.com/schwab/broadridgevsm/.

The purpose of the meeting will be to conduct the following items of business:

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Elect ten trustees to serve on the Board of Trustees of the Trust, and

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Consider any other business properly coming before the meeting or any adjournment or postponement thereof.

Shares of the Trust and its Funds are held by certain participating life insurance companies (“Insurance Companies”) in separate accounts established for the purpose of funding variable annuity contracts and variable life insurance policies (collectively, “variable contracts”). The Insurance Companies and their separate accounts and not the individual variable contract owners (“variable contract owners”) are the “shareholders” of the Trust and its Funds. The Insurance Companies will offer to variable contract owners that have allocated their variable contract values to the Trust and its Funds as of the close of business on March 7, 2022 (“Affected Contract Owners”) the opportunity to instruct the Insurance Companies as to how they should vote Trust shares held by the Insurance Companies with respect to the proposals to be considered at the meeting. As an Affected Contract Owner, you have the right to instruct the Insurance Companies as to the manner in which the Trust’s shares attributable to your variable contract should be voted. For ease of reference throughout the attached proxy statement, the Insurance Companies and Affected Contract Owners will be referred to as “shareholders” of the Trust and its Funds.

Shareholders who owned shares in any Fund in the Trust as of the close of business on March 7, 2022 are entitled to attend and vote at the meeting and any adjournment or postponement of the meeting. If you do not attend the meeting, you may vote by proxy by completing, signing and returning the enclosed proxy card by mail or by submitting your vote by internet or telephone. We encourage you to vote over the Internet or by telephone, following the instructions that appear on your proxy card(s). Using these voting methods will help reduce the time and costs associated with this proxy solicitation. Proxies may be revoked prior to the meeting by following the procedures detailed in the proxy materials.

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE
SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 1, 2022

The proxy materials are available online at www.proxyvote.com.

By order of the Board of Trustees,

/s/ Jonathan de St. Paer

Jonathan de St. Paer
President and Chief Executive Officer
March 16, 2022

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PROXY STATEMENT

SCHWAB ANNUITY PORTFOLIOS

The Board of Trustees (the “Board”) of Schwab Annuity Portfolios (the “Trust”) is sending these proxy materials to shareholders of each fund in the Trust (the “Funds”) (the Trust, together with The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Strategic Trust and Laudus Trust are referred to as the “Schwab Funds and ETFs”). The Board is soliciting proxies in connection with the special meeting of shareholders scheduled on June 1, 2022, at 9:00 a.m. Pacific Time. These proxy materials are being mailed to shareholders on or about April 1, 2022.

In light of public health concerns regarding the coronavirus pandemic, the meeting will be held in a virtual meeting format only. You will not be able to attend the meeting in person. To participate in the meeting virtually shareholders must register in advance by visiting https://www.viewproxy.com/schwab/broadridgevsm/ and submitting the requested required information to Broadridge Financial Solutions, Inc. (“Broadridge”), the Funds’ proxy tabulator.

Shares of the Trust and its Funds are held by certain participating life insurance companies (“Insurance Companies”) in separate accounts established for the purpose of funding variable annuity contracts and variable life insurance policies (collectively, “variable contracts”). The Insurance Companies and their separate accounts, and not the individual variable contract owners (“variable contract owners”), are the “shareholders” of the Trust and its Funds. In accordance with the Investment Company Act of 1940, as amended (the “1940 Act”), and certain interpretations by the staff of the Securities and Exchange Commission with respect to voting requirements of investment companies funding variable contracts, the Insurance Companies will offer to variable contract owners that have allocated their variable contract values to the Trust and its Funds as of the close of business on March 7, 2022 (“Affected Contract Owners”) the opportunity to instruct the Insurance Companies as to how they should vote Trust shares held by the Insurance Companies with respect to the proposals to be considered at the meeting. As an Affected Contract Owner, you have the right to instruct the Insurance Companies as to the manner in which the Trust’s shares attributable to your variable contract should be voted. The Insurance Companies will obtain these instructions by sending you this proxy statement, the notice of special meeting and a voting instruction form.

The Insurance Companies will attend the meeting in person or by proxy and will vote Trust shares held by them in accordance with the voting instructions received from their respective Affected Contract Owners. All valid and executed voting instructions forms returned in time to be voted at the meeting will be voted in accordance with the specifications thereon. Shares for which the Insurance Companies receive no timely voting instructions from Affected Contract Owners will be voted by the Insurance Companies in the same proportion as the shares for which Affected Contact Owners have provided voting instructions to the Insurance Companies with respect to such proposal. This proportional voting may result in a small number of Affected Contract Owners determining the vote on a proposal.

For ease of reference throughout this proxy statement, the Insurance Companies and Affected Contract Owners are referred to as “shareholders” of the Trust and its Funds.

The Board has fixed the record date as of the close of business on March 7. 2022. If you were a shareholder of one or more of the Funds at the close of business on the record date, you are entitled to notice of, and to vote at, the meeting. If you have any questions about attending the meeting virtually, please call 1-415-667-0780. A list of the Funds and the number of issued and outstanding shares of the Trust and the Funds entitled to vote is contained in a chart in Appendix A.

PROPOSAL – ELECTION OF TRUSTEES

Shareholders of all of the Funds in the Trust are being asked to vote on the election of trustees.

		Proposal Summary				Funds Voting on the Proposal
		Election of ten trustees to Schwab Annuity Portfolios, effective October 1, 2022.				Each Fund in Schwab Annuity Portfolios will vote together with all other Funds of the Trust on the proposal. A list of the Funds is contained in Appendix A.

Assuming that the proposal for the election of the ten trustees is approved by the Schwab Funds and ETFs, beginning on October 1, 2022, the same board of trustees will oversee all of the Schwab Funds and ETFs. All Schwab Funds and ETFs share the same investment adviser, Charles Schwab Investment Management, Inc., dba Schwab Asset Management (“Schwab Asset Management” or the “investment adviser”), and certain other administrative, legal, compliance, marketing and other functions. The Board believes that continued consolidation of board oversight of the Schwab Funds and ETFs, each of which is a mutual fund or exchange-traded fund, is expected to result in the continuation of certain efficiencies and benefits to the Trust and its shareholders. These benefits include:

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aligning oversight of the Schwab Funds and ETFs,

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streamlining Board communications by avoiding duplication of Board reporting,

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opportunities for enhanced governance by providing comprehensive Board oversight, and

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consistency of Board process and conservation of management and Board resources.

If approved, the following eight trustees, who currently serve on the Schwab Funds and ETFs’ Boards, will continue to serve on the Schwab Funds and ETFs’ Boards: Walter W. Bettinger, II, Robert W. Burns, Nancy F. Heller, David L. Mahoney, Jane P. Moncreiff, Kiran M. Patel, Kimberly S. Patmore and J. Derek Penn. In addition, if approved, Richard A Wurster, an interested trustee, and Michael J. Beer, an independent trustee will join the Schwab Funds and ETFs’ Boards effective October 1, 2022. While the Board may fill vacancies, it may only do so under applicable law, if, after filling a vacancy, at least two-thirds of the trustees were elected by shareholders. Because the Board may not appoint the additional proposed trustees and meet this requirement, the Board has determined that it is appropriate to hold an election at this time. Please note that Mr. Patel will retire from the Schwab Funds and ETFs’ Boards on December 31, 2022, in accordance with the Schwab Funds and ETFs’ retirement policy for trustees.

Recommendation to Elect Trustees

The Governance Committee recommended all of the nominees for election included in this proxy statement. Mr. Bettinger, Mr. Burns, Mr. Mahoney, Mr. Patel and Ms. Patmore have been

previously elected to the Boards. The Boards appointed Ms. Heller, Ms. Moncreiff and Mr. Penn as trustees in 2018, 2019 and 2021, respectively, and this is the first time they are standing for election since their appointment. The independent trustees recommended Ms. Heller, Ms. Moncreiff and Mr. Penn to the Governance Committee for appointment as trustees. The independent trustees recommended Michael J. Beer to the Governance Committee for nomination to the Board. The interested trustees, as defined below, recommended Richard A. Wurster to the Governance Committee for nomination to the Board. Each nominee has consented to serve as a trustee for the Funds if elected and will serve until the earlier of the next election of trustees or until his or her retirement, resignation or removal. The mailing address for each trustee is 211 Main Street, San Francisco, California 94105. Biographical information with respect to each nominee is noted below.

Certain trustees are “interested persons.” A trustee is considered an interested person of a Trust under the Investment Company Act of 1940, as amended (the “1940 Act”), if, among other things, he or she is an officer, director, or an employee of Schwab Asset Management or Charles Schwab & Co., Inc. (“Schwab”). A trustee also may be considered an interested person of a Trust under the 1940 Act if he or she owns stock of The Charles Schwab Corporation (“CSC”), a publicly traded company and the parent company of Schwab Asset Management and Schwab.

As used in this proxy statement, the terms “Fund Complex” and “Family of Investment Companies” refers to the Schwab Funds and ETFs.

Name, Year of Birth, and Positions(s) with the Trusts; (Term of Office and Length of Time Served(1))	Principal Occupations During the Past Five Years	Number of Portfolios in Fund Complex Overseen by the Trustee	Other Directorships Held by Trustee
INTERESTED TRUSTEES
Walter W. Bettinger II(2) 1960 Chairman and Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios since 2008; Schwab Strategic Trust since 2009; Laudus Trust since 2010)	Director and Chief Executive Officer (Oct. 2008-present) and President (Oct. 2008-Oct. 2021), The Charles Schwab Corporation; President and Chief Executive Officer (Oct. 2008-Oct. 2021) and Director (May 2008-Oct. 2021), Charles Schwab & Co., Inc.; Director (Apr. 2006-present), Charles Schwab Bank, SSB; Director (Nov. 2017-present), Charles Schwab Premier Bank, SSB; Director (July 2019-present), Charles Schwab Trust Bank; Director (May 2008-present) and President and Chief Executive Officer (Aug. 2017-present), Schwab Holdings, Inc.; Director (Oct. 2020-present), TD Ameritrade Holding Corporation; Director (July 2016-Oct. 2021), Charles Schwab Investment Management, Inc.	103	Director (2008-present), CSC

Name, Year of Birth, and Positions(s) with the Trusts; (Term of Office and Length of Time Served(1))	Principal Occupations During the Past Five Years	Number of Portfolios in Fund Complex Overseen by the Trustee	Other Directorships Held by Trustee
INTERESTED TRUSTEES
Richard A. Wurster(2) Nominee	President (Oct. 2021-present) and Executive Vice President – Schwab Asset Management Solutions (Apr. 2019-Oct. 2021), The Charles Schwab Corporation; President, Director (Oct. 2021-present), Executive Vice President – Schwab Asset Management Solutions (July 2019-Oct. 2021) and Senior Vice President – Advisory (May 2016-July 2019), Charles Schwab & Co., Inc.; President (Nov. 2021-present), Schwab Holdings, Inc.; Director (Oct. 2021- present) and Chief Executive Officer (Nov. 2019-Jan. 2022), Charles Schwab Investment Management, Inc.; Director, Chief Executive Officer and President (Mar. 2018- present), Charles Schwab Investment Advisory, Inc.; Chief Executive Officer (July 2016-Apr. 2018) and President (Mar. 2017-Apr. 2018), ThomasPartners, Inc.; Chief Executive Officer (July 2016-Apr. 2018), Windhaven Investment Management, Inc.	103	None
INDEPENDENT TRUSTEES
Michael J. Beer Nominee	Retired. Director, President and Chief Executive Officer (Dec. 2016-Sept. 2019), Principal Funds (investment management).	103	Principal Funds, Inc. (Dec. 2016-Sept. 2019)
Robert W. Burns 1959 Trustee (Trustee of Schwab Strategic Trust since 2009; The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust since 2016)	Retired/Private Investor (Jan. 2009-present). Formerly, Managing Director, Pacific Investment Management Company, LLC (PIMCO) (investment management) and President, PIMCO Funds.	103	None
Nancy F. Heller 1956 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2018)	Retired. President and Chairman (2014-2016), TIAA Charitable (financial services); Senior Managing Director (2003-2016), TIAA (financial services).	103	None

Name, Year of Birth, and Positions(s) with the Trusts; (Term of Office and Length of Time Served(1))	Principal Occupations During the Past Five Years	Number of Portfolios in Fund Complex Overseen by the Trustee	Other Directorships Held by Trustee
INDEPENDENT TRUSTEES
David L. Mahoney 1954 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust since 2011; Schwab Strategic Trust since 2016)	Private Investor (2001-present). Formerly, Co-Chief Executive Officer, McKesson Corporation (healthcare services).	103	Director (2004- present), Corcept Therapeutics Incorporated Director (2009- 2021), Adamas Pharmaceuticals, Inc. Director (2003- 2019), Symantec Corporation
Jane P. Moncreiff 1961 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2019)	Consultant (2018-present), Fulham Advisers LLC (management consulting); Chief Investment Officer (2009-2017), CareGroup Healthcare System, Inc. (healthcare).	103	None
Kiran M. Patel 1948 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust since 2011; Schwab Strategic Trust since 2016)	Retired. Executive Vice President and General Manager of Small Business Group (Dec. 2008-Sept. 2013), Intuit, Inc. (financial software and services for consumers and small businesses).	103	Director (2008- present), KLA-Tencor Corporation
Kimberly S. Patmore 1956 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2016)	Consultant (2008-present), Patmore Management Consulting (management consulting). Formerly, Chief Financial Officer and Executive Vice President, First Data Corporation (financial services).	103	None

Name, Year of Birth, and Positions(s) with the Trusts; (Term of Office and Length of Time Served(1))	Principal Occupations During the Past Five Years	Number of Portfolios in Fund Complex Overseen by the Trustee	Other Directorships Held by Trustee
INDEPENDENT TRUSTEES
J. Derek Penn 1957 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2021)	Head of Equity Sales and Trading (2006-2018), BNY Mellon (financial services).	103	None

(1)

Each Trustee shall hold office until the election and qualification of his or her successor, or until he or she dies, resigns or is removed. The Trust’s retirement policy requires that each independent trustee retire by December 31 of the year in which the Trustee turns 74 or the Trustee’s twentieth year of service as an independent trustee on any trust in the Fund Complex, whichever occurs first.

(2)

Mr. Bettinger and Mr. Wurster are Interested Trustees. Mr. Bettinger is an Interested Trustee because he owns stock of CSC, the parent company of Schwab Asset Management, the investment adviser for the Schwab Funds and ETFs, and is an employee of Schwab, the principal underwriter for The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust. Mr. Wurster is an Interested Trustee because he owns stock of CSC, is a director of Schwab Asset Management and is an employee and director of Schwab.

BOARD LEADERSHIP STRUCTURE

The description below is of the Board’s current leadership structure. The Chairman of the Board, Walter W. Bettinger II, is Chief Executive Officer and a member of the Board of Directors of CSC and an interested person of the Trust as that term is defined in the 1940 Act. The Board is comprised of a super-majority (75 percent) of trustees who are not interested persons of the Trust (i.e., independent trustees). The Trust does not have a single lead independent trustee. There are three primary committees of the Board: the Audit, Compliance and Valuation Committee; the Governance Committee; and the Investment Oversight Committee. Each of the Committees is chaired by an independent trustee, and each Committee is currently comprised solely of independent trustees. The Committee chairs preside at Committee meetings, participate in formulating agendas for those meetings, and coordinate with management to serve as a liaison between the independent trustees and management on matters within the scope of the responsibilities of each Committee as set forth in its Board-approved charter. The Board has determined that this leadership structure is appropriate given the specific characteristics and circumstances of the Trust. The Board made this determination in consideration of, among other things, the fact that the independent trustees of the Trust constitute a super-majority of the Board, the fact that Committee chairs are independent trustees, the number of funds (and classes) overseen by the Board, and the total number of trustees on the Board.

BOARD OVERSIGHT OF RISK MANAGEMENT

The description below is of the Board’s current oversight of risk management. Like most investment companies, fund management and its other service providers have responsibility for day-to-day risk management for the funds. The Board’s duties, as part of its risk oversight of the Trust, consist of monitoring risks identified during regular and special reports to the Committees of the Board, as well as regular and special reports to the full Board. In addition to monitoring such risks, the Committees and the Board oversee efforts of fund management and service providers to manage risks to which the funds of the Trust may be exposed. For example, the Investment Oversight Committee meets with portfolio managers and receives regular reports regarding investment risk and credit risk of a fund’s portfolio. The Audit, Compliance and Valuation Committee meets with the funds’ Chief Compliance Officer and Chief Financial Officer and receives regular reports regarding compliance risks, operational risks and risks related to the valuation and liquidity of portfolio securities. From its review of these reports and discussions with management, each Committee receives information about the material risks of the funds of the Trust and about how management and service providers mitigate those risks, enabling the independent Committee chairs and other independent members of the Committees to discuss these risks with the full Board.

The Board recognizes that not all risks that may affect the funds can be identified nor can processes and controls be developed to eliminate or mitigate the occurrence or effects of certain risks; some risks are simply beyond the reasonable control of the funds, their management, and service providers. Although the risk oversight functions of the Board, and the risk management policies of fund management and fund service providers, are designed to be effective, there is no guarantee that they will eliminate or mitigate all risks. In addition, it may be necessary to bear certain risks (such as investment-related risks) to achieve each fund’s investment objective. As a result of the foregoing and other factors, the funds’ ability to manage risk is subject to significant limitations.

INDIVIDUAL TRUSTEE NOMINEE QUALIFICATIONS

The Board has concluded that each of the trustees should initially and continue to serve on the Board because of (i) his or her ability to review and understand information about the Trust provided to them by management, to identify and request other information they may deem relevant to the performance of their duties, to question management regarding material factors bearing on the management of the Trust, and to exercise their business judgment in a manner that serves the best interests of the Trust’s shareholders and (ii) the trustee’s experience, qualifications, attributes or skills as described below.

The Board has concluded that Mr. Beer should serve as trustee of the Trust because of his experience serving as director, president and chief executive officer of Principal Funds and his knowledge and experience in the investment management industry.

The Board has concluded that Mr. Bettinger should serve as trustee of the Trust because of the experience he gained as president and chief executive officer of The Charles Schwab Corporation, his knowledge of and experience in the financial services industry, and the experience he has gained serving as trustee of The Charles Schwab Family of Funds, Schwab

Investments, Schwab Capital Trust and Schwab Annuity Portfolios since 2008; Schwab Strategic Trust since 2009; and Laudus Trust since 2010.

The Board has concluded that Mr. Burns should serve as trustee of the Trust because of the experience he gained as managing director of Pacific Investment Management Company, LLC (PIMCO) and president of PIMCO Funds as well as the experience he has gained serving as trustee of Schwab Strategic Trust since 2009; and The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust since 2016.

The Board has concluded that Ms. Heller should serve as trustee of the Trust because of the experience she gained as president of TIAA Charitable and as senior managing director at TIAA, the experience she has gained serving on other non-public company boards, her knowledge of and experience in the financial services industry, as well as the experience she has gained serving as trustee of the Schwab Funds and ETFs since 2018.

The Board has concluded that Mr. Mahoney should serve as trustee of the Trust because of the experience he gained serving as trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust since 2011 and Schwab Strategic Trust since 2016, as co-chief executive officer of McKesson Corporation, and his service on other public company boards.

The Board has concluded that Ms. Moncreiff should serve as trustee of the Trust because of the experience she gained as chief investment officer of CareGroup Healthcare System, the experience she has gained serving on other non-public company boards, her knowledge of and experience in the financial services industry, as well as the experience she has gained serving as trustee of the Schwab Funds and ETFs since 2019.

The Board has concluded that Mr. Patel should serve as trustee of the Trust because of the experience he gained serving as trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust since 2011 and Schwab Strategic Trust since 2016, as executive vice president, general manager and chief financial officer of Intuit, Inc., his service on other public company boards, and his experience serving as chair of the Schwab Funds’ and ETFs’ Audit, Compliance and Valuation Committee.

The Board has concluded that Ms. Patmore should serve as trustee of the Trust because of her experience serving as chief financial officer and executive vice president of First Data Corporation, her knowledge of and experience in management consulting, as well as the experience she has gained serving as trustee of the Schwab Funds and ETFs since 2016.

The Board has concluded that Mr. Penn should serve as trustee of the Trust because of the experience he gained as head of equity sales and trading of BNY Mellon and his knowledge of and experience in the financial services industry, as well as the experience he has gained serving as trustee of the Schwab Funds and ETFs since 2021.

The Board has concluded that Mr. Wurster should serve as trustee of the Trusts because of his experience leading investment advisory firms and organizations, including Schwab Asset Management, and his knowledge of and experience in the investment management industry.

CORPORATE GOVERNANCE INFORMATION

Board of Trustees and Board Committees

The authorized number of trustees of each Trust is currently nine and each Trust has nine trustees. The Board has authorized an increase in the authorized number of trustees of each Trust to ten, effective October 1, 2022. There are ten nominees for election to the Board of the Trust at the special meeting, effective October 1, 2022.

Currently, the Trust has an Audit, Compliance and Valuation Committee, an Investment Oversight Committee and a Governance Committee. Each of these committees is currently composed entirely of “independent trustees.”

The Audit, Compliance and Valuation Committee reviews the integrity of the Trust’s financial reporting processes and compliance policies, procedures and processes, and the Trust’s overall system of internal controls. The Audit, Compliance and Valuation Committee also reviews and evaluates the qualifications, independence and performance of the Trust’s independent auditors, and the implementation and operation of the Trust’s valuation policy and procedures. This Committee is comprised of at least three independent trustees and currently has the following members: Kiran M. Patel (Chair), Kimberly S. Patmore and J. Derek Penn. The Board has determined that Mr. Patel, Ms. Patmore and Mr. Penn are audit committee financial experts under applicable Securities and Exchange Commission definitions.

The Governance Committee reviews and makes recommendations to the Board regarding Trust governance-related matters, including but not limited to Board compensation practices, retirement policies and term limits, Board self-evaluations, the effectiveness and allocation of assignments and functions by the Board, the composition of Committees of the Board, and the training of trustees. The Governance Committee is responsible for selecting and nominating candidates to serve as trustees. The Governance Committee does not have a written policy with respect to consideration of candidates for trustee submitted by shareholders. However, if the Governance Committee determined that it would be in the best interests of the Trust to fill a vacancy on the Board, and a shareholder submitted a candidate for consideration by the Board to fill the vacancy, the Governance Committee would evaluate that candidate in the same manner as it evaluates nominees identified by the Governance Committee. Nominee recommendations may be submitted to the Secretary of the Trust at the Trust’s principal business address. This Committee is comprised of at least three independent trustees and currently has the following members: David L. Mahoney (Chair), Robert W. Burns and Kimberly S. Patmore. A copy of the Governance Committee charter is contained in Appendix B to this proxy statement.

The Investment Oversight Committee reviews the investment activities of the Trust and the performance of the Funds’ investment adviser. This committee is comprised of at least three trustees (at least two-thirds of whom shall be independent trustees) and currently has the following members: Jane P. Moncreiff (Chair), Robert W. Burns, Nancy F. Heller and David L. Mahoney.

The Board met five times during the fiscal year ended December 31, 2021, the Audit, Compliance and Valuation Committee met four times, the Investment Oversight Committee met four times and the Governance Committee met five times. Each trustee attended all Board and applicable committee meetings of the Trust during the Trust’s most recent fiscal year ended December 31, 2021. The Trust does not hold annual meetings of shareholders and does not have a policy with regard to the attendance of trustees at such meetings.

Evaluating and Nominating Candidates for Trustee

In the event a vacancy exists on the Board, or a vacancy is anticipated, the Governance Committee of the Board shall consider whether it is in the best interests of the Trust and its shareholders to nominate a disinterested person or an interested person to fill the vacancy. The Governance Committee may consider candidates recommended by members of the Committee, other independent trustees of the Board, or members of the Board who are interested persons of the Trust. The Governance Committee also may consider candidates recommended by a search firm engaged by the Committee, if the Committee chooses to engage a search firm. If the Governance Committee determines that it is in the best interests of the Trust and its shareholders to nominate a person who is not an interested person of the Trust, only those trustees who are not interested persons may select and nominate candidates for that position.

The Governance Committee, when evaluating candidates for trustee, seeks the following, minimum qualifications:

•

the ability to work together with other trustees, with full and open discussion and debate as an effective group,

•

current knowledge and experience in the Trust’s business or operations, contacts in the industries relevant to the Trust’s business, or substantial business, financial or industry-related experience commensurate with the size, complexity, and risk profile of the Trust, and

•

the willingness and ability to devote adequate time to the Trust’s business.

The Governance Committee also considers the following qualities and skills when making its determination whether a nominee is qualified:

•

relationships that may affect the independence of the trustee or conflicts of interest that may affect the trustee’s ability to discharge his or her duties,

•

diversity of experience and background, including the need for financial, business, academic, public or other expertise on the Board or Board committees, and

•

the fit of the individual’s skills and experience with those of the other trustees and potential trustees in comparison to the needs of the Trust.

When evaluating a candidate for nomination, the Governance Committee does not assign specific weight to any of these factors nor does the Committee believe that all of the criteria necessarily apply to every candidate. The Governance Committee considers these qualifications

and regularly assesses the overall effectiveness of the Boards in maintaining a balance of perspectives important to the Trust and its shareholders.

The Governance Committee does not have a written policy with respect to consideration of candidates for trustee submitted by shareholders. However, if the Governance Committee determined that it would be in the best interests of the Trust to fill a vacancy on the Board, and a shareholder submitted a candidate for consideration by the Board to fill the vacancy, the Governance Committee would evaluate that candidate in accordance with the qualifications set forth above.

If you wish to communicate with the Board or with the independent trustees of the Trust, you may send your communication in writing to the Secretary of the Trust, 211 Main Street, San Francisco, California 94105. You must include your name and address in the written communication and indicate whether you are a shareholder of the Fund. The Secretary will compile all communications, summarize lengthy, repetitive or duplicative communications and forward them to the appropriate trustee or trustees. The Secretary will not forward non-substantive communications or communications that pertain to personal grievances, but instead will forward them to the appropriate department for resolution. In such cases, the Secretary will retain a copy of such communications for review by any trustee upon his or her request.

Diversity

When identifying trustee nominees, the Governance Committee considers the qualifications and skills represented on the Board. The Board recognizes that a variety of viewpoints is vital to effective decision-making, constructive dialogue, and a healthy boardroom culture. As discussed in the “Evaluating and Nominating Candidates for Trustee” section above, one of the considerations evaluated by the Governance Committee is the diversity of experience and background of trustees. Although the Governance Committee has not adopted a formal definition of diversity in this context, factors generally considered by the Governance Committee include each nominee’s professional experience, education, and expertise on relevant matters to the Trust, general leadership experience and background. These considerations are broad, are consistent with non-discrimination practices, and aim to combine a diversity of skill sets and experience as well as background, including race, ethnicity and gender, in a complementary manner that is beneficial to the Trust and its shareholders.

Compensation of Trustees

Interested trustees receive no compensation from the Fund for their service as trustees.

Independent trustees receive compensation for their service, which is allocated among the Schwab Funds and ETFs based on a combination of the number of funds and the net assets of the funds in the Trusts. Each independent trustee currently receives the following compensation on an aggregate basis from the Schwab Funds and ETFs:

•

an annual retainer of $330,000 (paid quarterly),

•

an annual retainer of $20,000 (paid quarterly) for each Independent Trustee who serves as Chair of a Board committee,

•

$2,000 for each special Board or committee meeting of less than two hours,

•

$4,000 for each special Board or committee meeting of more than two hours, and

•

$4,000 per day in connection with preparation for and attendance at special appearances as determined by the trustees (the trustees received no compensation in the Trust’s prior fiscal year for special appearances).

Trustees are reimbursed reasonable out-of-pocket expenses for attending Board and committee meetings and special appearances.

The compensation paid to the trustees for the fiscal year ended December 31, 2021, is shown in the following table. The Trust does not offer pension or retirement benefits accrued as part of fund expenses, and so there is no column included for pension or retirement benefits in this table.

Name of Independent Trustee	Aggregate Compensation from the Trust			Total Compensation from the Trust and the Family of Investment Companies
Robert W. Burns		$	13,080		$	333,064
Nancy F. Heller		$	13,002		$	331,070
David L. Mahoney		$	13,080		$	333,064
Jane P. Moncreiff		$	13,785		$	351,013
Kiran M. Patel		$	13,707		$	349,019
Kimberly S. Patmore		$	13,002		$	331,070
J. Derek Penn(1)		$	7,531		$	191,958

(1)

Mr. Penn joined the Board effective June 1, 2021.

Deferred Compensation Plan

Independent trustees may enter into a fee deferral plan. Under this plan, deferred fees will be credited to an account established by the Trust as of the date that such fees would have been paid to the trustee. The value of this account will equal the value that the account would have if the fees credited to the account had been invested in the shares of Schwab Funds selected by the trustee. Currently, none of the independent trustees has elected to participate in this plan.

Ownership of Fund Securities

The following table shows the dollar range of equity securities beneficially owned by each trustee and trustee nominee in the Funds as of December 31, 2021.

Dollar Range of Equity Securities of each Fund

Name of Trustee

Schwab®
Government
Money Market
Portfolio

Schwab® S&P
500 Index
Portfolio

Schwab® VIT
Balanced
Portfolio

Schwab® VIT
Balanced with
Growth
Portfolio

Schwab® VIT
Growth
Portfolio

INTERESTED TRUSTEES

Walter W. Bettinger II

None

Richard A. Wurster

None

INDEPENDENT TRUSTEES

Robert W. Burns

None

Nancy F. Heller

None

David L. Mahoney

None

Jane P. Moncreiff

None

Kiran M. Patel

None

Kimberly S. Patmore

None

J. Derek Penn(1)

None

Michael J. Beer

None

(1)

Mr. Penn joined the Board effective June 1, 2021.

The following table shows the aggregate dollar range of trustee ownership in the Family of Investment Companies. Family of Investment Companies is defined as the Schwab Funds and ETFs.

Name of Trustee			Aggregate Dollar Range of Equity Securities in All Funds Overseen or to be Overseen by Trustee or Nominee in Family of Investment Companies
INTERESTED TRUSTEES
Walter W. Bettinger II			Over $100,000
Richard A. Wurster			Over $100,000
INDEPENDENT TRUSTEES
Robert W. Burns			Over $100,000
Nancy F. Heller			Over $100,000
David L. Mahoney			Over $100,000
Jane P. Moncreiff			Over $100,000
Kiran M. Patel			Over $100,000
Kimberly S. Patmore			Over $100,000
J. Derek Penn(1)			None
Michael J. Beer			None

(1)

Mr. Penn joined the Board effective June 1, 2021.

Officers of the Trust

The table below provides information regarding the Trust’s officers. The mailing address for each of the officers is c/o Schwab Asset Management, 211 Main Street, San Francisco, California 94105.

	Name of Officer, Year of Birth, and Positions(s) with the Trust (Term of Office and Length of Time Served(1))			Principal Occupation(s) During the Past Five Years
	Jonathan de St. Paer 1973 President and Chief Executive Officer (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2018)			Director (Apr. 2019-present), President (Oct. 2018-present), Chief Operating Officer (Jan. 2020-present) and Chief Executive Officer (Apr. 2019-Nov. 2019), Charles Schwab Investment Management, Inc.; Senior Vice President (June 2020-present) and Chief Operating Officer (Jan. 2020-present), Charles Schwab Investment Advisory, Inc.; Chief Executive Officer (Apr. 2019-present), President (Nov. 2018-present) and Trustee (Apr. 2019-Dec. 2020), Schwab Funds and ETFs; Director (Apr. 2019-present), Charles Schwab Worldwide Funds plc and Charles Schwab Asset Management (Ireland) Limited; Senior Vice President (Apr. 2019-present), Senior Vice President-Strategy and Product Development (CSIM) (Jan. 2014-Mar. 2019), and Vice President (Jan. 2009-Dec. 2013), Charles Schwab & Co., Inc.
	Mark Fischer 1970 Treasurer, Chief Financial Officer and Chief Operating Officer (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2013)			Treasurer, Chief Financial Officer (Jan. 2016- present) and Chief Operating Officer (Dec. 2020- present), Schwab Funds and ETFs; Assistant Treasurer (Dec. 2013-Dec. 2015), The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust; Assistant Treasurer (Nov. 2013-Dec. 2015), Schwab Strategic Trust; Chief Financial Officer (Mar. 2020-present) and Vice President (Oct. 2013-present), Charles Schwab Investment Management, Inc.; Executive Director (Apr. 2011-Sept. 2013), J.P. Morgan Investor Services; Assistant Treasurer (May 2005-Mar. 2011), Massachusetts Financial Service Investment Management.

	Name of Officer, Year of Birth, and Positions(s) with the Trust (Term of Office and Length of Time Served(1))			Principal Occupation(s) During the Past Five Years
	Omar Aguilar 1970 Vice President and Chief Investment Officer (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2011)			Chief Executive Officer (Jan. 2022-present), Chief Investment Officer (Apr. 2011-present) and Senior Vice President (Apr. 2011-Dec. 2021), Charles Schwab Investment Management, Inc.; Vice President and Chief Investment Officer (June 2011-present), Schwab Funds and ETFs; Head of the Portfolio Management Group and Vice President of Portfolio Management (May 2009-Apr. 2011), Financial Engines, Inc. (investment management); Head of Quantitative Equity (July 2004-Jan. 2009), ING Investment Management.
	Brett Wander 1961 Vice President and Chief Investment Officer (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2011)			Senior Vice President and Chief Investment Officer (Apr. 2011-present), Charles Schwab Investment Management, Inc.; Vice President and Chief Investment Officer (June 2011-present), Schwab Funds and ETFs; Senior Managing Director and Global Head of Active Fixed-Income Strategies (Jan. 2008-Oct. 2010), State Street Global Advisors; Director of Alpha Strategies (Apr. 2006-Jan. 2008), Loomis, Sayles & Company (investment management).
	William P. McMahon, Jr. 1972 Vice President and Chief Investment Officer (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2021)			Senior Vice President and Chief Investment Officer (Jan. 2020-present), Charles Schwab Investment Management, Inc.; Vice President and Chief Investment Officer (June 2021-present), Schwab Funds and ETFs; Senior Vice President and Chief Investment Officer – ThomasPartners Strategies (Apr. 2018-Dec. 2019), Charles Schwab Investment Advisory, Inc.; Senior Vice President and Chief Investment Officer (May 2001-Apr. 2018), ThomasPartners, Inc.
	Catherine MacGregor 1964 Chief Legal Officer and Secretary, Schwab Funds and Schwab ETFs Chief Legal Officer, Vice President and Clerk, Laudus Trust (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust since 2005; Schwab Strategic Trust since 2009)			Vice President (July 2005-present), Charles Schwab & Co., Inc.; Vice President (Sept. 2005- present), Charles Schwab Investment Management, Inc.; Vice President (Dec. 2005- present) and Chief Legal Officer and Clerk (Mar. 2007-present), Laudus Trust; Chief Legal Officer and Secretary (Oct. 2021-present), Vice President (Nov. 2005-Oct. 2021) and Assistant Secretary (June 2007-Oct. 2021), The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios; Chief Legal Officer and Secretary (Oct. 2021-present), Vice President and Assistant Secretary (Oct. 2009-Oct. 2021), Schwab Strategic Trust.

(1)

The President, Treasurer and Secretary hold office until their respective successors are chosen and qualified or until he or she sooner dies, resigns, is removed or becomes disqualified. Each of the other officers serves at the pleasure of the Board.

AUDITOR SELECTION AND FEES

The Audit, Compliance and Valuation Committee of the Trust has selected Deloitte & Touche LLP (“Deloitte”) as the independent registered accounting firm for the Trusts. Deloitte has served in this capacity for the Trusts since June 9, 2020. Deloitte conducts annual audits of each Fund’s financial statements, assists in the preparation of each Fund’s federal and state income tax returns and each Trust’s filings with the SEC, and consults with the Trusts as to matters of accounting and federal and state taxation. Prior to the selection of Deloitte, the Trusts’ independent registered public accounting firm was PricewaterhouseCoopers LLP, Three Embarcadero Center, San Francisco, California 94111. On June 8, 2020, the Prior Auditor resigned as the independent registered public accounting firm of the Schwab Funds Complex. The Prior Auditor’s reports on the financial statements of the fund for the fiscal years ended December 31, 2018, and December 31, 2019, did not contain an adverse opinion or disclaimer of opinion, and were not qualified or modified as to uncertainty, audit scope or accounting principles. During the fiscal years ended December 31, 2018 and December 31, 2019 and through June 8, 2020, there were no (1) disagreements with the Prior Auditor on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the Prior Auditor’s satisfaction, would have caused it to make reference to that matter in connection with its reports on the fund’s financial statements for such periods; or (2) “reportable events,” as that term is defined in Item 304 (a)(1)(v) of Regulation S-K under the Securities Exchange Act of 1934.

The Audit, Compliance and Valuation Committee has considered whether the provision by Deloitte of non-audit services to the Funds or of professional services to the Funds’ investment adviser and entities that control, are controlled by or are under common control with the investment adviser is compatible with maintaining Deloitte’s respective independence and has discussed Deloitte’s independence with them. A representative of Deloitte will be available by phone during the meeting, if needed, to make a statement if desired and to respond to appropriate questions from shareholders.

Audit Fees

The aggregate fees billed by Deloitte for the audit of the Funds’ annual financial statements and services that are normally provided by Deloitte in connection with statutory and regulatory filings or engagements were:

Fiscal Year End	Fees
12/31/21		$	103,520
12/31/20		$	103,520

Audit-Related Fees

“Audit-Related” fees include review of tax provisions as part of the audit of the Funds’ financial statements and are not reported under “Audit Fees” above. The aggregate fees billed by Deloitte for such services were:

Fiscal Year End	Fees
12/31/21		$	9,000
12/31/20		$	9,000

Tax Fees

“Tax” fees include tax compliance, tax advice and tax planning. The aggregate fees billed by Deloitte for such services were:

Fiscal Year End	Fees(1)
12/31/21		$	15,500
12/31/20		$	15,500

(1)

While the fees for preparation and review of tax returns shown above were performed on behalf of the Funds, those fees were not an expense of the Funds because they were paid for by Schwab.

All Other Fees

“All Other” fees include attestation in connection with Section 15(c) board reporting under the 1940 Act and represent fees not included in “audit fees,” “audit-related fees,” and “tax fees.” There are fees billed in the table below for other services by Deloitte to Schwab Asset Management, CSC, Schwab or other entities under CSC’s common control. The aggregate fees billed by Deloitte for such services were:

Fiscal Year End	Fees
12/31/21		$	0
12/31/20		$	0

Pre-Approval Policies and Procedures

The Trust does not have pre-approval policies and procedures as described in paragraph (c)(7)(i) of Rule 2-01 of Regulation S-X.

Non-Audit Services

Deloitte did not provide any non-audit services to the Trust except for those included in the tables above under “audit-related fees”, “tax fees” and “all other fees”. There are fees billed in the table below for non-audit services by Deloitte to Schwab Asset Management, CSC, Schwab, or other entities under CSC’s common control. The aggregate fees billed by Deloitte for such services were:

Fiscal Year End	Fees
12/31/21		$	3,088,431
12/31/20		$	3,577,864

INFORMATION ABOUT THE PROXY AND SPECIAL MEETING

Quorum Requirement

To take action on the proposal to elect trustees, a quorum (thirty-three and one-third percent (33 1∕3%) of shares present in person or represented by proxy and entitled to vote at the meeting) must be present in person or by proxy.

If a quorum is not present at the meeting, the persons named as proxies may propose one or more adjournments or postponements of such meeting to permit further solicitation of proxies. Any adjournment(s) or postponement(s) of a meeting with respect to the Trust will require the affirmative vote of a majority of those shares of the Funds present at the meeting in person or by proxy, whether or not a quorum is present. The meeting may be held as adjourned or postponed within a reasonable time after the date set for the original meeting without further notice.

Votes Required to Elect Trustees

Shareholders of all Funds within the Trust will vote together for the election of the trustees of the Trust (a list of the Funds of the Trust is included in Appendix A). To be elected as a trustee of the Trust, each nominee must receive the affirmative vote of the holders of a plurality of shares cast.

Voting Rights

As a shareholder, you are entitled to one vote for each full share of a Fund outstanding as of the close of business on the record date and a proportionate fractional vote for each fractional share held.

Revoking a Proxy

You may revoke your proxy and change your vote by:

•

signing a proxy card with a later date and returning it before the polls close at the meeting at 9:00 a.m. Pacific Time on June 1, 2022,

•

voting by telephone or on the Internet before 9:00 a.m. Pacific Time on June 1, 2022, or

•

voting at the meeting.

Signing a Proxy Without Specifying Voting Instructions

If you sign the proxy without giving instructions how to vote, your proxy will be voted:

•

for the election of each of the ten nominees as trustees, and

•

according to the best judgment of the persons named as proxies for any other matters coming before the meeting.

Unvoted Shares

All valid and executed voting instruction forms returned in time to be voted at the meeting will be voted by the Insurance Companies in accordance with the specifications thereon. Shares for which the Insurance Companies receive no timely voting instructions from Affected Contract Owners will be voted by the Insurance Companies in the same proportion as the shares for which Affected Contract Owners have provided voting instructions to the Insurance Companies with respect to such proposal. Abstentions will be counted in determining a quorum for the transaction of business at the special meeting. For purposes of the proposal scheduled to be presented at the special meeting, abstentions will not be counted as votes cast and, accordingly, will not have an effect on this proposal.

Other Business

We know of no business other than the proposal contained in this proxy statement to be considered at the meeting. However, if other matters are properly presented at the meeting, or at any adjournment or postponement of the meeting, and you have properly submitted your proxy, then the persons named as proxies will vote your shares on those matters according to their best judgment.

Proxy Solicitation

Each Fund has retained Broadridge at an estimated total cost to the Trust of $20,000 to assist in the solicitation of proxies. Each Fund will bear its pro rata share of costs of solicitation and expenses incurred in connection with solicitation costs based on the net assets of the Fund. However, Schwab Asset Management has voluntarily agreed to pay proxy costs for each Fund to the extent they exceed 0.0045% of the average daily net assets for a Fund.

As described in the Funds’ prospectuses, Schwab Asset Management is entitled to receive a fee from the Funds for its advisory and administrative services to the Funds, expressed as a percentage of each Fund’s average daily net assets. Schwab Asset Management and/or Schwab have agreed to waive fees and/or reimburse expenses of certain Funds through a specified period of time when the net operating expenses of these Funds reach a certain percentage of the Fund’s daily net assets. For purposes of the fee waiver and/or reimbursement, net operating expenses do not include, among other things, non-routine expenses. Schwab Asset Management is responsible for substantially all expenses of Schwab S&P 500 Index Portfolio, including the cost of transfer agency, custody, fund administration, legal, audit and other services, but excluding, among other things, extraordinary or non-routine expenses. As non-routine expenses, expenses related to this proxy solicitation and the preparation and distribution of the proxy statement will be excluded from the calculations of each Fund’s total operating expenses for purposes of Schwab Asset Management’s and its affiliates’ fee waiver and/or reimbursement obligations.

In addition to the solicitation of proxies by mail, officers of the Trust and officers and employees of Schwab Asset Management and Schwab also may solicit proxies electronically,

by telephone, by fax, in person or by other means. These employees and officers do not receive additional compensation for soliciting proxies.

Shareholder Proposals

The Trust does not hold annual shareholder meetings. Shareholders wishing to submit proposals to be included in the proxy statement for a Fund’s next meeting of shareholders must submit the proposal to the Fund within a reasonable period of time prior to that meeting. Proposals not received within a reasonable time before the proxy materials are printed and mailed will be considered untimely. None of the Funds currently plan to hold a meeting of shareholders in 2022.

Reports to Shareholders

Each Fund will furnish, without charge, copies of such Fund’s most recent annual and, if applicable, semi-annual reports to shareholders to any shareholder upon request. Each Fund’s annual and, if applicable, semi-annual reports to shareholders may be obtained from the Trust by calling the Funds at (800) 345-2550, by the Internet: https://www.schwabassetmanagement.com/schwabfunds_prospectus, or by writing to the Funds at 211 Main Street, San Francisco, California 94105.

INFORMATION REGARDING SCHWAB ANNUITY PORTFOLIOS

Investment Adviser and Administrator

Schwab Asset Management, 211 Main Street, San Francisco, California 94105 serves as the investment adviser and administrator to all of the Trust’s Funds. Schwab Asset Management is a wholly-owned subsidiary of CSC.

Custodian

Brown Brothers Harriman & Co., 50 Post Office Square, Boston, Massachusetts, 02110 serves as custodian for the Schwab S&P 500 Index Portfolio, Schwab VIT Balanced Portfolio, Schwab VIT Balanced with Growth Portfolio and Schwab VIT Growth Portfolio.

State Street Bank and Trust Company, One Lincoln Street, Boston, Massachusetts, 02111 serves as custodian for the Schwab Government Money Market Portfolio.

Distributor

Schwab serves as distributor for each of the Funds.

Beneficial Ownership

Each of the trustees and executive officers of the Funds, and collectively as a group, own less than 1% of each of the Funds as of March 7, 2022.

To the knowledge of the Trust, persons with record and/or beneficial ownership of more than 5% of any Fund as of March 7, 2022, are included in the table below.

Fund	Name and Address of Record or Beneficial Owner	Amount and Nature of Beneficial Ownership Shares Held	Percent of Fund
Schwab Government Money Market Portfolio	Great-West Life & Annuity VA-1 Signature 8515 E Orchard Rd Greenwood Village, CO 80111-5002	66,758,059.883 Record	32.11%
	Great-West Life & Annuity FBO Schwab Annuities One Source Choice 8515 E Orchard Rd 2T2 Greenwood Village, CO 80111-5002	40,906,673.373 Record	19.68%
	Great-West Life & Annuity FBO Schwab Annuities Advisor Choice 8515 E Orchard Rd 2T2 Greenwood Village, CO 80111-5002	30,317,239.975 Record	14.58%
	Great-West Life & Annuity VA-1 Signature 8515 E Orchard Rd Greenwood Village, CO 80111-5002	28,351,224.924 Record	13.64%
	Protective Life Insurance Company 2801 Highway 280 S Birmingham, AL 35223-2488	26,828,710.817 Record	12.91%
Schwab S&P 500 Index Portfolio	Nationwide Life Insurance Co NWPP c/o IPO Portfolio Accounting PO Box 182029 Columbus, OH 43218-2029	5,844,692.563 Record	27.11%
	Great-West Life & Annuity VA-1 Signature 8517 E Orchard Rd Greenwood Village, CO 80111	3,236,211.904 Record	15.01%
	Great-West Life & Annuity FBO Schwab Annuities One Source Choice 8515 E Orchard Rd 2T2 Greenwood Village, CO 80111-5002	2,447,313.811 Record	11.35%
	Nationwide Life Insurance Co NWPPVUL4 c/o IPO Portfolio Accounting PO Box 182029 Columbus, OH 43218-2029	2,308,560.909 Record	10.71%
	Protective Life Insurance Company 2801 Highway 280 S Birmingham, AL 35223-2488	1,465,143.085 Record	6.80%
	Nationwide Life Insurance Co NWVLI4 c/o IPO Portfolio Accounting PO Box 182029 Columbus, OH 43218-2029	1,365,244.212 Record	6.33%
	Great-West Life & Annuity FBO Schwab Annuities Advisor Choice 8515 E Orchard Rd 2T2 Greenwood Village, CO 80111-5002	1,353,858.304 Record	6.28%

Fund	Name and Address of Record or Beneficial Owner	Amount and Nature of Beneficial Ownership Shares Held	Percent of Fund
	NYL Insurance and Annuity Corp COLI PPVUL c/o NYLIAC 51 Madison Ave New York, NY 10010	1,341,635.710 Record	6.22%
	Great-West Life & Annuity VA-1 Signature 8515 E Orchard Rd Greenwood Village, CO 80111-5002	1,332,763.092 Record	6.18%
Schwab VIT Balanced Portfolio	Pacific Life Insurance Separate Account A of Pacific Life Insurance Co 700 Newport Center Dr Newport Beach, CA 92660-6307	4,959,515.771 Record	79.30%
	Protective Life Insurance Company 2801 Highway 280 S Birmingham, AL 35223-2488	640,782.264 Record	10.25%
	Pacific Life Insurance Separate Account A of Pacific Life & Annuity Co 700 Newport Center Dr Newport Beach, CA 92660-6307	333,869.918 Record	5.34%
Schwab VIT Balanced with Growth Portfolio	Pacific Life Insurance Separate Account A of Pacific Life Insurance Co 700 Newport Center Dr Newport Beach, CA 92660-6307	9,065,840.851 Record	84.93%
	Protective Life Insurance Company 2801 Highway 280 S Birmingham, AL 35223-2488	654,128.603 Record	6.13%
Schwab VIT Growth Portfolio	Pacific Life Insurance Separate Account A of Pacific Life Insurance Co 700 Newport Center Dr Newport Beach, CA 92660-6307	8,698,619.653 Record	92.93%

APPENDIX A

Funds and Outstanding Shares as of March 7, 2022

Fund	Outstanding Shares(1)
Schwab Government Money Market Portfolio		207,871,903.974
Schwab S&P 500 Index Portfolio		21,558,503.848
Schwab VIT Balanced Portfolio		6,253,800.906
Schwab VIT Balanced with Growth Portfolio		10,674,864.828
Schwab VIT Growth Portfolio		9,360,816.848
Total for Schwab Annuity Portfolios		255,719,890.404

(1)

The number of outstanding shares represents the number of votes to which each Fund is entitled.

APPENDIX B

GOVERNANCE COMMITTEE CHARTER

THE CHARLES SCHWAB FAMILY OF FUNDS,
SCHWAB INVESTMENTS,
SCHWAB CAPITAL TRUST,
SCHWAB ANNUITY PORTFOLIOS,
LAUDUS TRUST
AND SCHWAB STRATEGIC TRUST

As of June 4, 20191

PURPOSE

The Governance Committee (the “Committee”) of the Boards of Trustees (the “Board”) of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust, each a Massachusetts business trust, and Schwab Strategic Trust, a Delaware statutory trust (the “Trusts”), assists the Board in fulfilling its oversight responsibilities by reviewing governance-related matters and recommending candidates to serve as trustees.

COMPOSITION AND MEMBERSHIP

The Committee shall be composed of at least three members of the Board. Members of the Committee shall not be “interested persons” (as defined in the Investment Company Act of 1940, as amended) of the Trusts (“Independent Trustees”). The Committee shall appoint one of its members to serve as its Chairman. The Chairman will preside at each meeting of the Committee, participate in formulating agendas for those meetings, and coordinate with fund management to serve as a liaison between the Committee and fund management on matters within the scope of the responsibilities of the Committee. In addition, the Chairman will preside at meetings of the Independent Trustees, and participate in formulating agendas for meetings of the Board. Each member of the Committee shall serve until a successor is appointed.

AUTHORITY

The Committee shall have the resources and authority appropriate for purposes of discharging its responsibilities under this charter, including the authority to consult with counsel and/or to retain, at the Trusts’ expense, such other experts or consultants as the Committee deems necessary or appropriate to fulfill its responsibilities. The role of the Chairman of the

Charter initially adopted by The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust on August 31, 2005 and by Schwab Strategic Trust on October 12, 2009.

Committee shall include consulting with management with respect to matters to be considered at meetings of the Trusts’ Boards and committees.

The Board has delegated authority to the Committee to perform the activities set forth herein. Unless otherwise required by law, any decisions of the Committee shall be deemed to be recommendations to the Board and shall not be binding upon the Board or the Trusts. While the Committee has the responsibilities and powers set forth in this charter, this charter shall not be read to impose on the Committee or any member thereof any duty to take any action or supervise any activity of any Trust not otherwise specifically imposed by applicable law on the Committee (acting as a body) or any member of the Committee (acting individually). The Committee and members thereof shall be held to the same standard of care, as applicable, generally applied to the Board or a trustee under applicable law, and service on the Committee shall not cause any member thereof to be held to a standard of care different from that applicable to his or her service on the Board generally.

MEETINGS

The Committee shall meet at such times and with such frequency as is deemed necessary or appropriate by the Committee.

RESPONSIBILITIES

The responsibilities of the Committee include, but are not limited to, the following:

Governance-Related Matters

To review the composition and size of the Board to assure that the proper skills and experience are represented on the Board;

To recommend policies regarding retirement and term limits of trustees;

To plan and administer the Board’s self-evaluation process annually;

To oversee the selection of the Trusts’ legal counsel and independent legal counsel to the Independent Trustees, and to review reports from legal counsel regarding potential conflicts of interest;

To review on a periodic basis the allocation of responsibilities and functions to each of the Board’s committees and to recommend any changes in such responsibilities and functions that the Committee deems necessary or appropriate;

To review periodically Independent Trustee compensation and to recommend to the Board any changes the Committee may deem appropriate;

To establish policies and guidelines (if any) for the training of the trustees.

To review on a periodic basis the Trusts’ insurance programs and to recommend to the Board any changes it may deem appropriate;

Board Candidates and Nominees

To evaluate and nominate candidates to serve as trustees;

10.

To set any appropriate standards or qualifications for service as a trustee;

11.

To establish procedures for the consideration and evaluation of candidates to serve as trustees;

Miscellaneous

12.

To review this charter periodically and recommend any changes to the Board;

13.

To consider such other matters pertinent to the Committee’s purposes as the Committee deems necessary or appropriate; and

14.

To report its activities to the Board on a periodic basis and to make such determinations or recommendations with respect to the foregoing matters as the Committee may deem appropriate.

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Annuity

KEEP THIS PORTION FOR YOUR RECORDS DETACH AND RETURN THIS PORTION ONLY TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: Signature [PLEASE SIGN WITHIN BOX] Date Signature [Joint Owners] Date CHARLES SCHWAB & CO., INC. 9800 SCHWAB WAY LONE TREE, CO 80124 D72192-S43019 ! ! ! The Board of Trustees recommends that you vote FOR each of the nominees listed below: 01) Walter W. Bettinger II 02) Richard A. Wurster 03) Robert W. Burns 04) Nancy F. Heller 05) David L. Mahoney 06) Jane P . Moncreiff 07) Kiran M. Patel 08) Kimberly S. Patmore 09) J. Der ek Penn 10) Michael J. Beer 1. T o elect trustees for the Trust Nominees: For All Withhold All For All Except To withhold authority to vote for any individual nominee(s), mark "For All Except" and write the name(s) of the nominee(s) on the line below. Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by an authorized officer. To vote by Internet 1) Read the Proxy Statement and have the proxy card below at hand. 2) Go to website www.proxyvote.com or scan the QR Barcode above. 3) Follow the instructions provided on the website. 4) T o attend and vote at the meeting, please register by going to Virtual Shareholder Meeting at https://www.viewproxy.com/schwab/broadridgevsm/. To vote by Telephone 1) Read the Proxy Statement and have the proxy card below at hand. 2) Call 1-800-690-6903 3) Follow the instructions. To vote by Mail 1) Read the Proxy Statement. 2) Check the appropriate box on the proxy card below. 3) Sign and date the proxy card. 4) Return the proxy card in the envelope provided. SCAN TO VIEW MATERIALS & VOTE w FUND NAME WILL PRINT HERE

Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting to Be Held on June 1, 2022 The proxy materials for this meeting are available at www.proxyvote.com D72193-S43019 Schwab Annuity Portfolios PROXY FOR A SPECIAL MEETING OF SHAREHOLDERS TO BE HELD JUNE 1, 2022 THIS PROXY IS SOLICITED ON BEHALF OF THE BOARDS OF TRUSTEES OF THE FUNDS The undersigned hereby appoint(s) Michelle Bowman, Robin Nesbitt, Catherine MacGregor and Alexandra Riedel, and each of them as Proxies of the undersigned with full power of substitution, to vote and act with respect to all interests in each of the Funds with respect to which the undersigned is/are entitled to vote at the Special Meeting of Shareholders (“Special Meeting”) of each such Fund to be held virtually on June 1, 2022 at 9:00 a.m., Pacific Time, and at any adjournments or postponements thereof. Shareholders will not be able to attend the Special Meeting in person. Any shareholders wishing to participate in the Special Meeting by means of remote communication can do so at https://www.viewproxy.com/schwab/broadridgevsm/. The undersigned acknowledges receipt of the Notice of the Special Meeting and of the accompanying Proxy Statement, and revokes any proxy previously given with respect to such Special Meeting. This proxy, when properly executed, will be voted as instructed. If you sign without otherwise indicating a vote on the proposal, this proxy will be voted FOR the proposal. As to any other matter that may properly come before the Special Meeting or any adjournments thereof, the shares will be voted by the Proxies in accordance with their judgment. Continued and to be signed on the reverse side

Schwab Annuity Portfolios DEF 14ADefinitive proxy