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401K fees

By Terry Savage on July 18, 2021 | Financial Planning / Retirement

Hi Terry,
Several years ago I was laid off from an employer where I had a 401K plan through Nesteggs with employer contributions. I wanted to transfer that money into another plan I had with Vanguard in order to consolidate. I decided to just go ahead and retire about six months later. I was told by Human Resources to wait with the transfer as my employer was scheduled to make a contribution in my name shortly. That didn’t happen six months later so I made the transer as I know from experience that sometimes he made the contribution and sometimes did not depending on his financial situation. A year later the contribution was made and once again I transferred the money over to Vanguard. Thought I was done but now two years later I find out that another contribution of around $56.00 was made this past quarter thanks to something called a 401K Safe Harbor provision. I asked to have that money as well and was told that the fee for processing this is $150.00 and since that is more than the money I have it will be impossible to receive any of it. I have asked them what my other options are and have not yet heard back. Does this sound correct to you? Does this make sense? I am certainly open to any and all suggestions as this is now “lost” money.

Terry Says

Small businesses often have high costs associated with their retirement plans. Unless all the employees get together and threaten to file suit, nothing gets done. There have been some recent “headline” suits over fees charge in plans of major corporations.
Count yourself lucky and forget the $56. It’s not worth the high blood pressure.

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