Author Topic: New fees on Fidelity 401k  (Read 9236 times)


  • Magnum Stache
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New fees on Fidelity 401k
« on: April 05, 2014, 08:17:43 PM »
DH has $58k in his previous employer's 401k account because there's about $3k that's not vested.  If he ends up returning to that employer in the next few years, which is possible, although not probable, vesting would start again.  We have it in Spartan 500 index fund (FXSIX) which has a .05 expense ratio.

A couple days ago I noticed a $15.50 fee removed from the account.  We subsequently got a letter stating that there was now an administrative fee of $62/year, removed quarterly on 401k accounts for this employer, to every participant in the plan.  Additionally, if we yank it now, the whole year's fee will be deducted from the proceeds.  Thanks for letting us know. </sarcasm>  The letter refers to a previous "communication", but we don't remember getting that (and it may have just gone out to employees instead of former ones, who knows).

Is this widespread and I've just been oblivious?  We haven't decided what to do about this annoyance (and I realize that $62 out of $58k is just an annoyance), but I do wonder if anyone else has seen this from Fidelity. 

Because we got charged unexpected fees when changing brokerages 10 years ago, I have a visceral reaction to fees, probably more than is useful.  I know we can move a 401k to Vanguard without fees (except this lovely new one), but if we move this one, I'm going to want to move all our accounts to Vanguard as well (my Roth, his Roth, his tIRA, misc stocks) and they'll probably charge fees for each of those, too.  Grouse, grouse, grouse.


  • Senior Mustachian
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Re: New fees on Fidelity 401k
« Reply #1 on: April 05, 2014, 08:35:35 PM »
Probably the latest management fad du jour.  Ours started charging ~$30-$40/yr sometime last year.


  • Magnum Stache
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Re: New fees on Fidelity 401k
« Reply #2 on: April 06, 2014, 05:52:35 AM »
I don't think it's really Fidelity.  I'm sure Fidelity charges fees for administration of all 401k plans, they can't be doing it for free.  It's just a question of whether the employer covers those fees or passes them through to the participants.  It looks like in this case the employer decided to start passing it through.


  • Walrus Stache
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Re: New fees on Fidelity 401k
« Reply #3 on: April 06, 2014, 10:24:30 AM »
I don't think this is uncommon. My previous employer started passing on a $9/quarter management fee on to me after I left the company. Your 0.05% expense ratio on your $58k is already costing you $29/year. This extra fee effectively bumps up the expense ratio to 0.15%. Is the chance of keeping your $3k in the unlikely event that your husband returns to that company worth $62/year to you? Only you can decide that.


  • Handlebar Stache
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Re: New fees on Fidelity 401k
« Reply #4 on: April 06, 2014, 11:24:37 AM »
We have had similar fees in our fidelity 401ks (mine and Mrs. Root of Good's).  I rolled my 401k into my IRA when I left my old employer since I had better fund choices in an IRA.  We'll probably keep Mrs. RoG's 401k because the fees are more than offset by us getting access to institutional share classes of a wide variety of Vanguard funds.  Paying 0.02% expense ratios is awesome and well worth the $40-50 in fees we pay each year on her $0.25+ million 401k balance.


  • 5 O'Clock Shadow
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Re: New fees on Fidelity 401k
« Reply #5 on: July 06, 2014, 01:03:36 PM »
I just started a new job (and thus a new 401k) in April and today noticed that I had quarterly fees taken out.  With the different levels of fees others are reporting it seems to certainly be employer-specific.  I'm not sure if companies have different levels of subsidizing or if Fidelity's fees vary by company size.  Whatever.  Mine are $2.50 and $7.75 a quarter or $41 a year. 

As a percentage of what I have invested so far there it is ridiculous.  What I wonder is why I pay nothing in record keeping fees for keeping my fairly substantial other accounts with Fidelity (Rollover IRA, taxable brokerage, Roth..)  What extra burden does Fidelity have for a 401k that compels them to charge these fees?


  • Pencil Stache
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Re: New fees on Fidelity 401k
« Reply #6 on: July 06, 2014, 03:00:22 PM »
It's a nominal fee, and far from outrageous. If you have a better place to put it, then consider a rollover somewhere else, however, someone metnioned you're basically paying 0.15% fees (.05 + $62/yr) on the $58k balance, so if you can get a similar fund for less than 0.15%/yr, then go for it, otherwise, even 0.15% is a VERY LOW expense ratio.