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Help a reader with retirement account rollover

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3:41 pm
March 11, 2013

20s Finances


posts 1147

Hey all,


I'm hoping you all might be able to help me respond to a reader's question that I received today. Below is his response. Feel free to link to relevant articles.

At a prior job I was generously giving to a Roth IRA with ADP. A year
after leaving that job, I noticed the fees were nibbling away at the
non-existent gains ADP was providing my balance.

I decided to roll over my Roth into my self-invested Roth at Vanguard.
I made several calls to ADP's India Call Center who informed me that I
would be levied a $50 fee for closing my account. Fine, better than
losing $30/yr over the last two years to fees and an utter lack of
investment gains.

But when the money transferred I found they had taken roughly half of
the money I had put into the account ($550). At no point was this
"Forfeiture Debit" discussed or mentioned on the voluminous paperwork
I filled out.

My old job did not contribute much to my retirement account (retail is
retail), but I am very distressed that so much of my personal money is
being withheld and that I was never informed of this throughout the
lengthy roll over process.

My calls to India are met by baffled employees who cannot explain the
charge and can only pretend to empathize with my first world problems.
What can I do? Is there anything? I'm almost 30 and playing catch-up
to a bad economy that has dealt me a tough hand with jobs and taking
this much of a hit on my retirement is just upsetting.



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6:57 pm
March 11, 2013

Jeff Rose


posts 574

I've processed quite a few rollover in my 10 years of being an advisor and I've never heard of such a thing.

I can see if there was a vesting schedule with the employers contribution, but that doesn't seem like the case here. 

4:23 am
March 12, 2013



posts 1466

I did a google search on 'forefiture debit' and the most common theme is that it's money that the company was contributing that hadn't been fully vested.  So I guess this leads to the question of whether 100% of the money in the balance was from payroll deductions or was some contributed by the company.  If it was contributed by the company, then you should contact the HR department and ask for clarification on the vesting policy.  ADP will not be of any help here, they have no visibility into the HR policy, they just do what they're given by the HR department.

Either way, I would first pull a page from Chris Elliot, the guy who is best known for tracking complaints in the travel industry, and start by putting your complaint in writing through their various contact forms and such.

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7:54 am
March 12, 2013

Frugal Confessions

Houston, TX


posts 1622

And you're positive you were 100% vested in the plan like Jeff had mentioned?

Amanda L Grossman

Frugal Confessions

Frugal Confessions @ the Houston Chronicle


9:13 am
March 12, 2013

This That And The MBA


posts 240

I agree with jeff. it sounds like the employee was not fully vested and the employer too back their matching contribution.


i would have him contact the employer and find out what the matching contribution percentages were for his years of service.




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10:31 am
March 12, 2013

20s Finances


posts 1147

Thanks guys/gals ! That makes sense, but it sounds like his employer wasn't matching. I emailed him with your suggestions, asking for clarification. I'll be sure to let you know what I hear.



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2:30 pm
March 24, 2013



posts 125

I've been processing rollovers for over 10 years and I've also never seen a fee that high. $50 sounds about right, not $550.  

As most have said, it's probably the difference between vested and non, fully vested funds.

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