Vanguard solo 401 k switching to ascensus. Thoughts?

[lilybluerose]

Hi! I am really pretty basic when it comes to my knowledge of all things investing. I like a set it and forget it approach. I recently received a letter stating that vanguard solo 401ks will be now done through ascensus vs vanguard directly. What are your thoughts? I see on other sites people are switching over to fidelity for that. I have my HSA with fidelity, and am wondering if I should really consider doing that.

Thanks!

[bacchi]

Check if Fidelity has moved into the 2000s. When I had a solo 401k there, it required contributions to be snail mailed.

[Mississippi Mudstache]

Hi, I had a solo 401k for a while. All of my IRAs were with Fidelity, but I still chose to open my solo 401k with eTrade, because Fidelity made it so difficult. eTrade was really helpful and easy.

That said, I think Ascensus is just a subsidiary of Vanguard. I doubt much will change (other than fees, and it shouldn't be much more).

[dandarc]

Their "Vanguard-only" i401K charges $20 per participant per year + $20 per fund each participant has.

If that winds up being their fee on the recently acquired accounts, even though I know I can do better, for $40 / year, I'm probably not going to bother changing anything.

[SweatingInAR]

I have always disliked Vanguard's i401k interface, so this Ascensus switch is giving me the impulse to switch my SO's i401k to a different provider. I originally picked Vanguard because we have accounts there, but dislike that I had to make a completely different account for the Small Business side. Account administration tasks, like changing my mailing address, have been painful.

We already have accounts with Fidelity and Schwab, so they are in the running and seem to top the lists of i401k provider ratings.

Another option is to roll the i401k into an IRA (SO has a Vanguard IRA already) and open a new i401k somewhere else. It might be less paperwork overall, but would drop in a big basis in traditional IRA that would impact one's ability to do a Backdoor Roth IRA contribution... if they are near the Roth IRA income limit.

[lilybluerose]

Their "Vanguard-only" i401K charges $20 per participant per year + $20 per fund each participant has.

If that winds up being their fee on the recently acquired accounts, even though I know I can do better, for $40 / year, I'm probably not going to bother changing anything.

Yah this is fine by me! Especially since moving it over seems more stressful to me lol Ty for the info!

[sonofsven]

I'm going to leave mine alone and see how it is after the switch, hopefully it will be just fine.

[Alternatepriorities]

I have an i401k with Vanguard and was about to start at thread on this topic. The fees are not that high all things considered, but I do feel a bit slighted by it. It doesn't feel true to the Vanguard I've promoted to all my friends and family for the past 10 years. It looks to me like Ascensus is a totally independent company. I have only two funds in my i401k, but at a minimum I should shuffle things around to have only one there. If I want to keep the same AA, i could move money in my IRA to match. I've also considered just rolling the money into my IRA and closing the i401k. I haven't contributed to it since early retirement... But I've kept the business alive with minimal work and left the i410k just to have the option if I did earn enough to use it sometime in the future... The increased fee and dealing with a new company makes me question if that's really worth it. I've also been thinking lately that I really do have enough in tax deferred savings and should just pay the taxes to have access to the funds now... I can't imagine any scenario that would ever push us beyond the 22% bracket.

[AdrianC]

Check if Fidelity has moved into the 2000s. When I had a solo 401k there, it required contributions to be snail mailed.

They have, finally. Can now do EFT transfer from bank to 401k. Oddly, cannot transfer from Fidelity taxable brokerage to 401k.

[Alternatepriorities]

Check if Fidelity has moved into the 2000s. When I had a solo 401k there, it required contributions to be snail mailed.

They have, finally. Can now do EFT transfer from bank to 401k. Oddly, cannot transfer from Fidelity taxable brokerage to 401k.

What are fidelity’s fees like for an i401k?

[YttriumNitrate]

I was the 401k administrator at my old firm, and we did Vanguard via Ascensus. It was okay. The customer services was mediocre, the firm fees were so-so, but the funds available were great. If I was able to do it over again, I probably would have pushed for us to go with Employee Fiduciary instead of Ascensus.

[AdrianC]

Check if Fidelity has moved into the 2000s. When I had a solo 401k there, it required contributions to be snail mailed.

They have, finally. Can now do EFT transfer from bank to 401k. Oddly, cannot transfer from Fidelity taxable brokerage to 401k.

What are fidelity’s fees like for an i401k?

I don't think I've paid any fees. Free trades. All the usual stocks and ETFs are available. Cash is yielding 5% or so.

[Alternatepriorities]

Check if Fidelity has moved into the 2000s. When I had a solo 401k there, it required contributions to be snail mailed.

They have, finally. Can now do EFT transfer from bank to 401k. Oddly, cannot transfer from Fidelity taxable brokerage to 401k.

What are fidelity’s fees like for an i401k?

I don't think I've paid any fees. Free trades. All the usual stocks and ETFs are available. Cash is yielding 5% or so.

Seems like the best thing for me to do might be roll my current account into my IRA and then IF i ever need it again open one with Fidelity. The only penalty would be needing to make a decision before the end of the calendar year if I thought i was going to need it or not and get the account open by dec 31.

[bacchi]

I believe the "successor plan rule" requires a year wait after closing a solo 401k and before opening a new one for the same business. You could open a SIMPLE or SEP instead.

[Alternatepriorities]

I believe the "successor plan rule" requires a year wait after closing a solo 401k and before opening a new one for the same business. You could open a SIMPLE or SEP instead.

That is good to know. I don’t  think there is a scenario where I would need to contribute this year. Is it for the calendar year, 12 months, or until the end of the next calendar year?

[bacchi]

I believe the "successor plan rule" requires a year wait after closing a solo 401k and before opening a new one for the same business. You could open a SIMPLE or SEP instead.

That is good to know. I don’t  think there is a scenario where I would need to contribute this year. Is it for the calendar year, 12 months, or until the end of the next calendar year?

12 months from the last distribution of the old plan. 1) Terminate the plan; 2) Distribute the assets; 3) Wait 12 months from distribution.


Edit: Don't forget to file Form 5500EZ for the plan termination. This can be done online at https://www.efast.dol.gov/welcome.html.

[Alternatepriorities]

I believe the "successor plan rule" requires a year wait after closing a solo 401k and before opening a new one for the same business. You could open a SIMPLE or SEP instead.

That is good to know. I don’t  think there is a scenario where I would need to contribute this year. Is it for the calendar year, 12 months, or until the end of the next calendar year?

12 months from the last distribution of the old plan. 1) Terminate the plan; 2) Distribute the assets; 3) Wait 12 months from distribution.


Edit: Don't forget to file Form 5500EZ for the plan termination. This can be done online at https://www.efast.dol.gov/welcome.html.

Thank you for that reminder. I probably would have forgotten to do so otherwise. Still debating internally the merits, but leaning toward "I'm FIRE'd, stop trying to squirrel away money"... If i earn extra money I'll just pay the taxes and put it in a taxable account where it's easier to do something interesting with.

[dandarc]

I believe the "successor plan rule" requires a year wait after closing a solo 401k and before opening a new one for the same business. You could open a SIMPLE or SEP instead.

That is good to know. I don’t  think there is a scenario where I would need to contribute this year. Is it for the calendar year, 12 months, or until the end of the next calendar year?

12 months from the last distribution of the old plan. 1) Terminate the plan; 2) Distribute the assets; 3) Wait 12 months from distribution.


Edit: Don't forget to file Form 5500EZ for the plan termination. This can be done online at https://www.efast.dol.gov/welcome.html.

Thank you for that reminder. I probably would have forgotten to do so otherwise. Still debating internally the merits, but leaning toward "I'm FIRE'd, stop trying to squirrel away money"... If i earn extra money I'll just pay the taxes and put it in a taxable account where it's easier to do something interesting with.

And if you do use the efast website, triple check that you've actually submitted the form on time - that thing is built for CPAs submitting many forms for many businesses, so e-signing the form is actually not the end of the process.

[sonofsven]

I admit my heart skipped a beat when I logged into Vanguard after receiving an email note about my "transaction" yesterday and saw a balance of $0 where my solo 401k used to be!

[dandarc]

I admit my heart skipped a beat when I logged into Vanguard after receiving an email note about my "transaction" yesterday and saw a balance of $0 where my solo 401k used to be!

Same - they got the order of emails wrong since Friday - should have been like 5 "we're transferring your assets from a to b - expect a trade confirmation email" on Friday. Not a trade-confirm followed a few hours later by an explanation / reminder that this is happening right now.

[Alternatepriorities]

I admit my heart skipped a beat when I logged into Vanguard after receiving an email note about my "transaction" yesterday and saw a balance of $0 where my solo 401k used to be!

Same - they got the order of emails wrong since Friday - should have been like 5 "we're transferring your assets from a to b - expect a trade confirmation email" on Friday. Not a trade-confirm followed a few hours later by an explanation / reminder that this is happening right now.

I was unable to create an account at the Ascensus website this morning to view the account as a participant and I have yet to receive the email code to set up an account as the plan sponsor. So far it doesn't exactly seem like a smooth transition.

[seattlecyclone]

I'm happy I got around to rolling my Vanguard solo 401(k) into my IRA before the Ascensus transition. I'm not currently doing any self-employment, and it's nice to have one fewer account to deal with (and the same number of investment companies!) rather than adding another investment company into the mix for a relatively small portion of my stash.

[Alternatepriorities]

I'm happy I got around to rolling my Vanguard solo 401(k) into my IRA before the Ascensus transition. I'm not currently doing any self-employment, and it's nice to have one fewer account to deal with (and the same number of investment companies!) rather than adding another investment company into the mix for a relatively small portion of my stash.

I almost did that and then decided I'd roll with the transfer as it seems increasingly likely I may actually want to contribute to it this year. Thanks to an earlier comment by Bacchi I won't be held up by the "successor plan rule" if I do.

[dandarc]

I admit my heart skipped a beat when I logged into Vanguard after receiving an email note about my "transaction" yesterday and saw a balance of $0 where my solo 401k used to be!

Same - they got the order of emails wrong since Friday - should have been like 5 "we're transferring your assets from a to b - expect a trade confirmation email" on Friday. Not a trade-confirm followed a few hours later by an explanation / reminder that this is happening right now.

I was unable to create an account at the Ascensus website this morning to view the account as a participant and I have yet to receive the email code to set up an account as the plan sponsor. So far it doesn't exactly seem like a smooth transition.

I got both emails yesterday - sign up worked fine for me. Haven't done a contribution or withdrawal yet of course.

[Alternatepriorities]

I admit my heart skipped a beat when I logged into Vanguard after receiving an email note about my "transaction" yesterday and saw a balance of $0 where my solo 401k used to be!

Same - they got the order of emails wrong since Friday - should have been like 5 "we're transferring your assets from a to b - expect a trade confirmation email" on Friday. Not a trade-confirm followed a few hours later by an explanation / reminder that this is happening right now.

I was unable to create an account at the Ascensus website this morning to view the account as a participant and I have yet to receive the email code to set up an account as the plan sponsor. So far it doesn't exactly seem like a smooth transition.

I got both emails yesterday - sign up worked fine for me. Haven't done a contribution or withdrawal yet of course.

I have since been able to create accounts and log in as both the employee and as the employer. I found the interface to be less intuitive than Vanguard so I decided to try making a discressionary contribution. I tried to call their support department was put on hold with an estimated 24 minute wait... they offered to call me back when my time came, that was two days ago and they have not called back. I think figured out my question myself so I haven't tried again. All in all I'm disappointed, this feels a lot more like working with WF and less like Vanguard.