How Are Rollovers Represented in Vanguard 401k?

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dlong
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How Are Rollovers Represented in Vanguard 401k?

Post by dlong » Thu Feb 08, 2018 6:51 pm

I have multiple Rollover IRA accounts from previous 401(k). If I do a rollover of these Rollover IRA accounts into a Vanguard 401k (employer sponsored), how are the accounts represented?

Currently, when I look at my Vanguard 401k, looking at "sources", I see that the money is separated by
  • Pre-tax deferrals
  • Company Match
  • 2% Annual Contribution
  • Roth Deferrals
  • 2018 Roth-In Plan Conversion
:?: When I roll the Rollover IRA accounts into the Vanguard 401k, will the money go into the Pre-tax deferrals? Or will they add additional "source" for each rollover IRA? Or something else?

:?: Bonus question (for the future)... when the Vanguard 401k closes and I rollover the 401k into regular vanguard account, how many accounts is needed? One for each of the source?

Thanks!

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Earl Lemongrab
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Re: How Are Rollovers Represented in Vanguard 401k?

Post by Earl Lemongrab » Fri Feb 09, 2018 2:44 pm

Most likely it will have a separate account under the hood. That's the way Megacorp does it. It allows in-service distribution of rollover contributions.
This week's fortune cookie: "Your financial life will be secure and beneficial." So I got that going for me, which is nice.

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dlong
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Re: How Are Rollovers Represented in Vanguard 401k?

Post by dlong » Fri Feb 09, 2018 6:28 pm

Earl Lemongrab wrote:
Fri Feb 09, 2018 2:44 pm
Most likely it will have a separate account under the hood. That's the way Megacorp does it. It allows in-service distribution of rollover contributions.
Is it a single separate account or one for each Rollover IRA?

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Earl Lemongrab
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Re: How Are Rollovers Represented in Vanguard 401k?

Post by Earl Lemongrab » Fri Feb 09, 2018 7:08 pm

dlong wrote:
Fri Feb 09, 2018 6:28 pm
Earl Lemongrab wrote:
Fri Feb 09, 2018 2:44 pm
Most likely it will have a separate account under the hood. That's the way Megacorp does it. It allows in-service distribution of rollover contributions.
Is it a single separate account or one for each Rollover IRA?
I don't have an answer. I would think it's likely that there is separate one for each. I can't relate personal experience there.
This week's fortune cookie: "Your financial life will be secure and beneficial." So I got that going for me, which is nice.

Alan S.
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Location: Prescott, AZ

Re: How Are Rollovers Represented in Vanguard 401k?

Post by Alan S. » Fri Feb 09, 2018 7:23 pm

dlong wrote:
Thu Feb 08, 2018 6:51 pm
I have multiple Rollover IRA accounts from previous 401(k). If I do a rollover of these Rollover IRA accounts into a Vanguard 401k (employer sponsored), how are the accounts represented?

Currently, when I look at my Vanguard 401k, looking at "sources", I see that the money is separated by
  • Pre-tax deferrals
  • Company Match
  • 2% Annual Contribution
  • Roth Deferrals
  • 2018 Roth-In Plan Conversion
Are these numbers just your annual contributions? Since no earnings show up, it appears that these amounts are just contributions for a period of time, not balances at the end of the period.

:?: When I roll the Rollover IRA accounts into the Vanguard 401k, will the money go into the Pre-tax deferrals? Or will they add additional "source" for each rollover IRA? Or something else?

I agree with Earl that there should be a separate category for rollovers. One for all IRA rollovers should suffice, however if another qualified plan was rolled in, which could include after tax contributions, those rollovers would probably be separate from the IRA rollovers. However, plan accounting is not standardized. Plans may have more categories than they list on the employee statements.

:?: Bonus question (for the future)... when the Vanguard 401k closes and I rollover the 401k into regular vanguard account, how many accounts is needed? One for each of the source?

No, not once for each source. Obviously, any Roth money must go into your Roth IRA, pre tax money can go into either your TIRA or Roth IRA, and you might send highly appreciated employer shares to a taxable brokerage account to utilize NUA.

Thanks!

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dlong
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Re: How Are Rollovers Represented in Vanguard 401k?

Post by dlong » Mon Feb 12, 2018 6:33 pm

Alan S. wrote:
Fri Feb 09, 2018 7:23 pm
dlong wrote:
Thu Feb 08, 2018 6:51 pm
I have multiple Rollover IRA accounts from previous 401(k). If I do a rollover of these Rollover IRA accounts into a Vanguard 401k (employer sponsored), how are the accounts represented?

Currently, when I look at my Vanguard 401k, looking at "sources", I see that the money is separated by
  • Pre-tax deferrals
  • Company Match
  • 2% Annual Contribution
  • Roth Deferrals
  • 2018 Roth-In Plan Conversion
Are these numbers just your annual contributions? Since no earnings show up, it appears that these amounts are just contributions for a period of time, not balances at the end of the period.
I do not I understand your queston. The list is of "sources" where the contributions come from, I did not include any $ amonts. For example, the 2% Annual contribtion is an "extra 2% that the company adds in addition to the 6% of 50% matching that the company provides".
Alan S. wrote:
Fri Feb 09, 2018 7:23 pm
:?: When I roll the Rollover IRA accounts into the Vanguard 401k, will the money go into the Pre-tax deferrals? Or will they add additional "source" for each rollover IRA? Or something else?

I agree with Earl that there should be a separate category for rollovers. One for all IRA rollovers should suffice, however if another qualified plan was rolled in, which could include after tax contributions, those rollovers would probably be separate from the IRA rollovers. However, plan accounting is not standardized. Plans may have more categories than they list on the employee statements.

:?: Bonus question (for the future)... when the Vanguard 401k closes and I rollover the 401k into regular vanguard account, how many accounts is needed? One for each of the source?

No, not once for each source. Obviously, any Roth money must go into your Roth IRA, pre tax money can go into either your TIRA or Roth IRA, and you might send highly appreciated employer shares to a taxable brokerage account to utilize NUA.

Thanks!
I don't know what NUA is. :) Okay, now I do (just read up on it). Interesting ... not I have any company stock in my 401k, however, they do offer it through.

The reasons for the multiple accounts questions are:
1) If I move multiple rollover accounts into 401k and it becomes a single account, it would be less maintance during rebalance.
2) Monies inside 401k may have increased protection against legal judgments (bankrupties, law suits, etc.) than Rollover IRA

So if I roll the rollovers it into the Vanguard 401k, if both 1 & 2 were true, it that would be nice. And when rolled out in a few years, if it end up with 2 accounts (tIRA and Roth IRA) instead of 3+ accounts (ie: tIRA, ROth IRA, additional one(s) for rollver of rollovers). :?

Alan S.
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Location: Prescott, AZ

Re: How Are Rollovers Represented in Vanguard 401k?

Post by Alan S. » Mon Feb 12, 2018 9:54 pm

You did not include any dollar amounts for the 5 categories you listed, but does your statement?

Statements do not necessarily include all the dollar breakdowns that the plan must track to operate. The statements might be consolidating some categories just to keep them manageable.

If you roll in IRA accounts, since by law you cannot roll in after tax contributions or Roth IRA balances, I don't see any need for more than one additional category - ie. IRA rollovers. If other employer plan balances were rolled in you could probably add more than one category since the plan could pick up Roth and after tax contribution balances from employer plans, but not from IRAs.

Because there is considerable variance between plans in accounting and investment options, you would have to check with your plan to determine how re balancing would be done. Some plans require you to maintain a uniform % across all sub accounts, some don't.

Further, the number of categories maintained in your plan have only a partial correlation to the number of accounts you would need when the plan including all it's components is rolled to a rollover IRA or Roth IRA. For your IRAs after separation, you basically only need one Roth and one TIRA (excluding any NUA option) to receive the rollovers, but you may want the IRAs that receive the direct rollovers to be rollover IRAs for creditor protection purposes. In that case, if you have contributary TIRA and Roth IRA accounts now, you would have to open two new ones to receive the rollovers.

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