My employer offers a 401k through Empower. The administrative fee is 0.5% annual which is applied as a 0.125% quarterly fee that is deducted from my balance about the 17th day of each calendar quarter. The 0.125% is multiplied by an number representing the balance of assets. The problem is the number used for the asset balance is not on the quarterly statement. After 3 calls including one with a registered representative, no one can explain where the number for the amount of assets comes from. It is not the asset balance on the first day of the quarter, the last day of quarter, or an average of the two. It is close to the average of the balance on the first day and last day of the quarter, but not an exact match. I suspect it may be using some type of average daily balance, but manually verifying that would be tedious since it would take 91 individual queries to find the balance at the end of each day of a quarter. Can anyone verify how Empower determinces asset balance used to calculate the fee?
I want to know the details of how the balance used to calcuate the fee is determined since I expect to move a large amount through the account temporarily as part of a reverse rollover from an IRA to avoid the pro-rata rule. It may cost me a $1000 or more in fees if the high temporary balance has significant impact on the asset number used to calculate the 0.125% fee. The timing of when the additional money goes into the account and back out to an IRA is somewhat under my control. To avoid the pro rata rule, I need to have the money in my employers 401k at year end, but once the after-tax IRA money has been converted to a Roth, I will move money out to lower fee IRAs since I am older than 59.5 and allowed to request roll-over distributions.
I want to know the details of how the balance used to calcuate the fee is determined since I expect to move a large amount through the account temporarily as part of a reverse rollover from an IRA to avoid the pro-rata rule. It may cost me a $1000 or more in fees if the high temporary balance has significant impact on the asset number used to calculate the 0.125% fee. The timing of when the additional money goes into the account and back out to an IRA is somewhat under my control. To avoid the pro rata rule, I need to have the money in my employers 401k at year end, but once the after-tax IRA money has been converted to a Roth, I will move money out to lower fee IRAs since I am older than 59.5 and allowed to request roll-over distributions.
Statistics: Posted by Riverflow — Fri Jul 19, 2024 4:39 pm — Replies 0 — Views 178