Vanguard to Exit Individual 401(k), Multi-SEP, and SIMPLE IRA Plans With Ascensus Deal

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foolio97
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Vanguard to Exit Individual 401(k), Multi-SEP, and SIMPLE IRA Plans With Ascensus Deal

Post by foolio97 »

I just saw this in my news feed:

Ascensus to Acquire Vanguard Individual 401(k), Multi-SEP, and SIMPLE IRA Plans
https://www.prnewswire.com/news-release ... 17572.html
DRESHER, Pa., April 16, 2024 /PRNewswire/ -- Ascensus announced today a definitive agreement to acquire Vanguard's Individual 401(k), Multiple Participant SEP (Multi-SEP), and SIMPLE IRA Plans business.

Under the transaction, Ascensus will assume recordkeeping and client servicing for Vanguard's current line-up of SIMPLE, Multi-SEP, and Individual 401(k) retirement plans, and increase its overall retirement plans under administration to nearly 280,000 plans.

Ascensus will provide custodial and trustee services, recordkeeping, client servicing, transaction processing, tax reporting, and other services, and plan participants will retain access to a diverse lineup of Vanguard mutual funds via the Ascensus platform. Vanguard will continue to offer a one-person SEP IRA for small business owners who do not employ others. This agreement does not include Vanguard's other retirement solutions.
...
The transaction is expected to close in the third quarter of 2024 and the acquired business will operate as part of the Ascensus Retirement line of business.
...
and then found this online:
Breaking: Vanguard to Exit Individual 401(k) Business with Ascensus Deal
https://www.napa-net.org/news-info/dail ... ensus-deal

COMMENTARY
I've never heard of Ascensus but should do a little due diligence to determine if I should (1) transition from Vanguard over to Ascensus or (2) jump off the wagon to Fidelity, Schwab, E*Trade, or someone else.

OPTIONS FOR SOLO 401k
I just skimmed the following:
https://thecollegeinvestor.com/18174/co ... k-options/
which has a helpful table part-way down that I'll try to include here (as an image):

Image
[Image fixed by admin LadyGeek --see below]

1. Stay with Ascensus: I have never heard of them. Does anyone have any experience with a "Solo 401k" plan through Ascensus? Or, Ascensus in general?
2. Transfer to Fidelity: it looks like Fidelity does not offer a Roth component to a Solo 401k, which probably makes this a non-starter for us, assuming that is still accurate.
3. It looks like Schwabb offers Roth and Traditional within their Solo 401k, does anyone have any feedback on Solo 401ks through Schwabb?
4. It looks like E*Trade offers Roth and Traditional within their Solo 401k, does anyone have any feedback on Solo 401ks through E*Trade?
5. Third Party Solo 401k Providers (Non-Prototype / MySolo401k) to potentially unlock mega-backdoor Roth.
6. ____________ (other options to consider?)

MITIGATING RISK WITH SOLO 401k PENALTIES
I'll mention that there are very substantial and punitive penalties associated with the Solo 401k if you make certain mistakes (e.g., failing to file 5500EZ when required (1) once you're over $250k or (2) closing out your plan). Does anyone have any thoughts on whether certain companies above (Schwabb, E*Trade, Fidelity, MySolo401k) are better at helping to mitigate/manage that risk? i.e., sending you pre-filled 5500-EZ forms once you are required to file them? Helpful Solo 401k phone support?
Last edited by foolio97 on Tue Apr 16, 2024 10:02 pm, edited 3 times in total.
aristotelian
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Re: Vanguard to Exit Individual 401(k), Multi-SEP, and SIMPLE IRA Plans With Ascensus Deal

Post by aristotelian »

Sure would have been nice to hear this first directly from Vanguard. I will be transferring to Schwab.
CuriousGeorgeTx
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Re: Vanguard to Exit Individual 401(k), Multi-SEP, and SIMPLE IRA Plans With Ascensus Deal

Post by CuriousGeorgeTx »

foolio97 wrote: Tue Apr 16, 2024 9:30 pm 3. It looks like Schwabb offers Roth and Traditional within their Solo 401k, does anyone have any feedback on Solo 401ks through Schwabb?
DW opened a Solo 401k at Schwab which she used to consolidate her various IRAs and 403bs to clear the way for back door Roths. The process with Schwab was simple and we never had any trouble. She has since rolled that over to an IRA. Only in the final year did it get to the $250k that would trigger the 5500 EZ filing requirement, so the only one filed was the final one. I cannot comment on whether Schwab would prompt one to file it. But they did everything else.
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Re: Vanguard to Exit Individual 401(k), Multi-SEP, and SIMPLE IRA Plans With Ascensus Deal

Post by whodidntante »

Congratulations to Ascensus and Vanguard! :P
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Re: Vanguard to Exit Individual 401(k), Multi-SEP, and SIMPLE IRA Plans With Ascensus Deal

Post by SwiftKey »

My employer 401k plan is already with Ascensus/Vanguard. It’s a weird and janky setup, and the Ascensus tools leave a lot to be desired. But, at the end of the day, I can hold Vanguard index funds with no participant fees, so whatever.

My previously employer used Guideline and it was far and away better user experience. Still the same on Vanguard index funds.
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Re: Vanguard to Exit Individual 401(k), Multi-SEP, and SIMPLE IRA Plans With Ascensus Deal

Post by beyou »

The NY 529 plan has been using Ascensus and Vanguard for many years now.
I saved and spent the funds on my kids college education, and found Ascensus site and support to be very good.
No issues with anything for many years of having them admin my 529. It held all Vanguard funds but the site and service was by Ascensus.


Overall I think it great that Vanguard is getting out of non-core services so they can focus their resources on their main business.
401k admin has little to do with running a mutual fund. There are all sorts of regulations about record keeping for a 401k, different from a regular mutual fund shareholder recordkeeping system and different from a brokerage system. To me if Vanguard wants to phase out the fund only platform, then this makes similar sense for them as well. I worked for a major active mutual fund manager and we also didn't run 401k administration. My own 401k had my employer's funds but the site and service was from another firm (similar to Vanguard + Ascensus).

My introduction to Vanguard was having an older employer's 401k administered by Vanguard back in the 1990s.
This is the only downside for them. 401k is often the first savings vehicle for those new to the workforce.
Was a good way to get me into the Vanguard family. Made me a boglehead before I heard of bogleheads.
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Re: Vanguard to Exit Individual 401(k), Multi-SEP, and SIMPLE IRA Plans With Ascensus Deal

Post by tj »

Ascensus has been doing the recordkeeping for Vanguard's small business 401ks for at least a decade at this point. I guess they wanted to branch out into the self employed plans and Vanguard wanted to dump em.
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Re: Vanguard to Exit Individual 401(k), Multi-SEP, and SIMPLE IRA Plans With Ascensus Deal

Post by rv26 »

SwiftKey wrote: Tue Apr 16, 2024 9:58 pm My employer 401k plan is already with Ascensus/Vanguard. It’s a weird and janky setup, and the Ascensus tools leave a lot to be desired. But, at the end of the day, I can hold Vanguard index funds with no participant fees, so whatever.

My previously employer used Guideline and it was far and away better user experience. Still the same on Vanguard index funds.
I agree Ascensus tools and company leave a lot to be desired. I transferred my 401k to an IRA 4 years ago. I still get statements on the unvested balance. I've call multiple times and the account is still open.
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Re: Vanguard to Exit Individual 401(k), Multi-SEP, and SIMPLE IRA Plans With Ascensus Deal

Post by CalPoppy »

Word is there will be a per participant yearly fee along with about a $20-$25 yearly fee per fund.
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Re: Vanguard to Exit Individual 401(k), Multi-SEP, and SIMPLE IRA Plans With Ascensus Deal

Post by unc81 »

CalPoppy wrote: Wed Apr 17, 2024 12:45 am Word is there will be a per participant yearly fee along with about a $20-$25 yearly fee per fund.
Yep, can't find the PDF now but I think it was $425 per year + $150 per participant + .07% AUM. We're looking at moving for sure.
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Re: Vanguard to Exit Individual 401(k), Multi-SEP, and SIMPLE IRA Plans With Ascensus Deal

Post by AB609 »

unc81 wrote: Wed Apr 17, 2024 7:48 am
CalPoppy wrote: Wed Apr 17, 2024 12:45 am Word is there will be a per participant yearly fee along with about a $20-$25 yearly fee per fund.
Yep, can't find the PDF now but I think it was $425 per year + $150 per participant + .07% AUM. We're looking at moving for sure.
If that's true, it will definitely have me looking elsewhere.
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Re: Vanguard to Exit Individual 401(k), Multi-SEP, and SIMPLE IRA Plans With Ascensus Deal

Post by LonScott »

unc81 wrote: Wed Apr 17, 2024 7:48 am
CalPoppy wrote: Wed Apr 17, 2024 12:45 am Word is there will be a per participant yearly fee along with about a $20-$25 yearly fee per fund.
Yep, can't find the PDF now but I think it was $425 per year + $150 per participant + .07% AUM. We're looking at moving for sure.
They have a Vanguard only plan Individual 401(k) featuring
Vanguard investments that costs $20 per part. and $20 per fund yearly for both. Details https://www.ascensus.com/solutions/reti ... ividual-k/ The link list available funds.

Not great cost but not as bad as their other 401k plans. I was considering closing out, xfer to my Vanguard IRA and opening a new solo 401k at Schwab. I am well under 250k and probably only have one more year for contributions, only for ACA reasons. I am not sure this is the best option so looking for issues with it. I looks like we have 3 months until the accounts are moved.

I am not happy about this but whatever as say on Reddit. The only info we have is the Press release from Ascensus. Perhaps they will give better info but I suspect that will come from Ascensus. Press release that other media is copying. https://www.prnewswire.com/news-release ... 17572.html Edits: various grammar mistakes.
Last edited by LonScott on Wed Apr 17, 2024 9:04 am, edited 1 time in total.
unc81
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Re: Vanguard to Exit Individual 401(k), Multi-SEP, and SIMPLE IRA Plans With Ascensus Deal

Post by unc81 »

That's good to know, if it's just $20/year/person and per fund, that's not bad at all. Hopefully that will be what we get. Here's the PDF I was referencing earlier: https://www.retsupport.com/resources/pd ... tsheet.pdf
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Re: Vanguard to Exit Individual 401(k), Multi-SEP, and SIMPLE IRA Plans With Ascensus Deal

Post by Target2019 »

My SEP-IRA at Vanguard is single participant. Maybe I will dodge this bullet, maybe not.

I would hate to move it to Schwab or Fidelity for a transfer bonus.
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Re: Vanguard to Exit Individual 401(k), Multi-SEP, and SIMPLE IRA Plans With Ascensus Deal

Post by jebmke »

Target2019 wrote: Wed Apr 17, 2024 9:05 am My SEP-IRA at Vanguard is single participant. Maybe I will dodge this bullet, maybe not.

I would hate to move it to Schwab or Fidelity for a transfer bonus.
I've never had anything other than individual assets at VG. My 401k) [employer] and my NQ deferred comp were administered by Fidelity. My NQ options plan was administered by Schwab. Schwab had a few issues back then but of the three, VG would be my last choice for this type of holding. Fidelity was flawless and would be my first choice. In fact, if I had a real reason to move my individual assets somewhere, they would probably be the first place I'd consider.
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Re: Vanguard to Exit Individual 401(k), Multi-SEP, and SIMPLE IRA Plans With Ascensus Deal

Post by Nver2Late »

FWIW - Vanguard has updated their small business site with the new plan offerings - when you click on the i401K it sends you to Ascensus Vanguard only plan. There is a difference in Vanguard fund availability, so there may be some migration issues for some folks. But offerings appear pretty diverse. Not looking forward to the small fee, but it's still better than what I had at Megacorp.

The fee says per fund and per participant. Does anyone know if you hold the same fund in both Roth and Traditional i401K whether its 2 fees or 1? I'll probably adjust to the one-fund portfolio.

(Edit: Answer per Vanguard is to ask Ascensus, but they were pretty sure its 2 fees since the funds are separate accounts)
Last edited by Nver2Late on Wed Apr 17, 2024 2:06 pm, edited 1 time in total.
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Re: Vanguard to Exit Individual 401(k), Multi-SEP, and SIMPLE IRA Plans With Ascensus Deal

Post by Kenkat »

beyou wrote: Tue Apr 16, 2024 11:07 pm Overall I think it great that Vanguard is getting out of non-core services so they can focus their resources on their main business.

401k admin has little to do with running a mutual fund. There are all sorts of regulations about record keeping for a 401k, different from a regular mutual fund shareholder recordkeeping system and different from a brokerage system. To me if Vanguard wants to phase out the fund only platform, then this makes similar sense for them as well. I worked for a major active mutual fund manager and we also didn't run 401k administration. My own 401k had my employer's funds but the site and service was from another firm (similar to Vanguard + Ascensus).
My first thought when I read this matched yours - Vanguard probably didn’t feel they had the scale to operate in the 401k space in the way they wanted, so they chose to exit.

At the financial services firm I worked for before I retired, we did 401k administration as one division of the company and were always doing acquisitions of other 401k admin platforms, including one very large one when I was there in the billions of dollars of assets. Our management was always talking about scale and the necessity to grow that block of business more quickly. Grow or die. I agree, 401k administration has some overlap with fund and asset management, but also it’s own very specialized rules and operations.

Interestingly, we also had an asset management division including publicly offered mutual funds that we sold off at some point for a similar reason - lack of scale / focus on core businesses. It’s just interesting that you have firms looking to exit a business line and other firms looking to scale up. We are good at “x” so let’s make “x” bigger. We aren’t that great at “y” so let’s sell it and use that money somewhere else.
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Re: Vanguard to Exit Individual 401(k), Multi-SEP, and SIMPLE IRA Plans With Ascensus Deal

Post by bsteiner »

Someone just set up an individual 401(k) plan at Vanguard but didn't yet put any money into it. To avoid the new fees, how would she close the Vanguard plan (and set one up at Fidelity)? Or can she just ignore it and set one up at Fidelity?

If the Vanguard plan is plan 001, would the Fidelity plan be 001 (since she never used the Vanguard plan) or 002? Would it matter whether she closed the Vanguard plan or just let it sit?
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Vanguard Solo 401k being transitioned to Ascensus

Post by RoadRat »

[Thread merged into here --admin LadyGeek]

Advisor called and gave me the news.

He gave me four options:

1. Opt out by 7/12 or automatic transition on 7/19
2. Rollover to vanguard IRA
3. Transfer to another firm
4. Liquidate and pay taxes

https://sb.web.vanguard.com/

Fun. How's everyone's experience with Fidelity?

[RoadRat's post, regarding his question (How's everyone's experience with Fidelity?) has been merged with this on-going discussion about Fidelity.

Moderator Pops1860]
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Re: Vanguard to Exit Individual 401(k), Multi-SEP, and SIMPLE IRA Plans With Ascensus Deal

Post by Target2019 »

jebmke wrote: Wed Apr 17, 2024 9:10 am
Target2019 wrote: Wed Apr 17, 2024 9:05 am My SEP-IRA at Vanguard is single participant. Maybe I will dodge this bullet, maybe not.

I would hate to move it to Schwab or Fidelity for a transfer bonus.
I've never had anything other than individual assets at VG. My 401k) [employer] and my NQ deferred comp were administered by Fidelity. My NQ options plan was administered by Schwab. Schwab had a few issues back then but of the three, VG would be my last choice for this type of holding. Fidelity was flawless and would be my first choice. In fact, if I had a real reason to move my individual assets somewhere, they would probably be the first place I'd consider.
Pretty sure my SEP-IRA at Vanguard goes back to the previous century. Signed and mailed in a paper. No extra fees since then. It worked for me. Unless I see something specific, it will sit there and keep working for me in retirement. I'll have no qualms pulling it into my Schwab Rollover IRA if I hear something about additional fees.
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Re: Vanguard Solo 401k being transitioned to Ascensus

Post by BogleTaxPro »

RoadRat wrote: Wed Apr 17, 2024 3:02 pm Advisor called and gave me the news.

He gave me four options:

1. Opt out by 7/12 or automatic transition on 7/19
2. Rollover to vanguard IRA
3. Transfer to another firm
4. Liquidate and pay taxes

https://sb.web.vanguard.com/

Fun. How's everyone's experience with Fidelity?
viewtopic.php?t=266538 fidelity mega-thread
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Re: Vanguard Solo 401k being transitioned to Ascensus

Post by TwstdSista »

RoadRat wrote: Wed Apr 17, 2024 3:02 pm Advisor called and gave me the news.

He gave me four options:

1. Opt out by 7/12 or automatic transition on 7/19
2. Rollover to vanguard IRA
3. Transfer to another firm
4. Liquidate and pay taxes

https://sb.web.vanguard.com/

Fun. How's everyone's experience with Fidelity?

[RoadRat's post, regarding his question (How's everyone's experience with Fidelity?) has been merged with this on-going discussion about Fidelity.

Moderator Pops1860]
The Fidelity solo 401k is great - easy to use and simple to set up. But there is no Roth option which is a deal breaker for some people. (if you want the Roth option, I believe Schwab also has a great solo 401k plan)
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Re: Vanguard Solo 401k being transitioned to Ascensus

Post by RoadRat »

TwstdSista wrote: Wed Apr 17, 2024 3:45 pm
RoadRat wrote: Wed Apr 17, 2024 3:02 pm Advisor called and gave me the news.

He gave me four options:

1. Opt out by 7/12 or automatic transition on 7/19
2. Rollover to vanguard IRA
3. Transfer to another firm
4. Liquidate and pay taxes

https://sb.web.vanguard.com/

Fun. How's everyone's experience with Fidelity?

[RoadRat's post, regarding his question (How's everyone's experience with Fidelity?) has been merged with this on-going discussion about Fidelity.

Moderator Pops1860]
The Fidelity solo 401k is great - easy to use and simple to set up. But there is no Roth option which is a deal breaker for some people. (if you want the Roth option, I believe Schwab also has a great solo 401k plan)
Thank you. Can I transfer all assets (IRA, 401k, Personal) to Fidelity without tax implications? Does Fidelity offer Vanguard funds? Thanks.
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Re: Vanguard to Exit Individual 401(k), Multi-SEP, and SIMPLE IRA Plans With Ascensus Deal

Post by LadyGeek »

Upon further review, RoadRat's question has been merged into the ongoing Ascensus discussion.

RoadRat - You had a duplicate post, which I've removed. There were no replies.
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Re: Vanguard to Exit Individual 401(k), Multi-SEP, and SIMPLE IRA Plans With Ascensus Deal

Post by LadyGeek »

foolio97 wrote: Tue Apr 16, 2024 9:30 pm OPTIONS FOR SOLO 401k
I just skimmed the following:
https://thecollegeinvestor.com/18174/co ... k-options/
which has a helpful table part-way down that I'll try to include here (as an image):
Image
The "image" in your post meant the forum software has an error. Hover over the image, right-click --> Open image in a new tab --> Copy-n-paste the URL into your post. (I fixed your post.)

Image
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Re: Vanguard to Exit Individual 401(k), Multi-SEP, and SIMPLE IRA Plans With Ascensus Deal

Post by Leesbro63 »

Someone mentioned rolling a Solo 401(k) into an IRA. What would be any disadvantage to this, other than going forward, you'll still need a Solo 401(k) for new yearly contributions?
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Re: Vanguard to Exit Individual 401(k), Multi-SEP, and SIMPLE IRA Plans With Ascensus Deal

Post by sailaway »

Leesbro63 wrote: Wed Apr 17, 2024 4:26 pm Someone mentioned rolling a Solo 401(k) into an IRA. What would be any disadvantage to this, other than going forward, you'll still need a Solo 401(k) for new yearly contributions?
Loss of ERISA and complicating backdoor Roth: the same issues whenever you rollover from a 401k to IRA.
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Re: Vanguard to Exit Individual 401(k), Multi-SEP, and SIMPLE IRA Plans With Ascensus Deal

Post by CFM300 »

Has anyone received a direct notice from Vanguard? I haven't, which I find strange and unprofessional.

Update: I received a letter via snail mail on 4/22.
Last edited by CFM300 on Mon Apr 22, 2024 11:28 am, edited 1 time in total.
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Re: Vanguard to Exit Individual 401(k), Multi-SEP, and SIMPLE IRA Plans With Ascensus Deal

Post by jason1500 »

I have an individual 401k and Individual Roth 401k with Vanguard. Does anyone know if this new company allows Roth contributions? I specifically went with Vanguard because of that reason. Ameritrade, Fidelity, Schwab, doesn't offer.
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Re: Vanguard to Exit Individual 401(k), Multi-SEP, and SIMPLE IRA Plans With Ascensus Deal

Post by Nver2Late »

jason1500 wrote: Wed Apr 17, 2024 6:00 pm I have an individual 401k and Individual Roth 401k with Vanguard. Does anyone know if this new company allows Roth contributions? I specifically went with Vanguard because of that reason. Ameritrade, Fidelity, Schwab, doesn't offer.
From Vanguard's small business website:

ASCENSUS
Individual(k)

An Individual(k)—also known as Individual 401(k)—maximizes retirement savings if you're self-employed or a business owner with no employees other than your spouse. Ascensus also offers a Roth option.
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Re: Vanguard to Exit Individual 401(k), Multi-SEP, and SIMPLE IRA Plans With Ascensus Deal

Post by beyou »

Kenkat wrote: Wed Apr 17, 2024 2:05 pm
beyou wrote: Tue Apr 16, 2024 11:07 pm Overall I think it great that Vanguard is getting out of non-core services so they can focus their resources on their main business.

401k admin has little to do with running a mutual fund. There are all sorts of regulations about record keeping for a 401k, different from a regular mutual fund shareholder recordkeeping system and different from a brokerage system. To me if Vanguard wants to phase out the fund only platform, then this makes similar sense for them as well. I worked for a major active mutual fund manager and we also didn't run 401k administration. My own 401k had my employer's funds but the site and service was from another firm (similar to Vanguard + Ascensus).
My first thought when I read this matched yours - Vanguard probably didn’t feel they had the scale to operate in the 401k space in the way they wanted, so they chose to exit.

At the financial services firm I worked for before I retired, we did 401k administration as one division of the company and were always doing acquisitions of other 401k admin platforms, including one very large one when I was there in the billions of dollars of assets. Our management was always talking about scale and the necessity to grow that block of business more quickly. Grow or die. I agree, 401k administration has some overlap with fund and asset management, but also it’s own very specialized rules and operations.

Interestingly, we also had an asset management division including publicly offered mutual funds that we sold off at some point for a similar reason - lack of scale / focus on core businesses. It’s just interesting that you have firms looking to exit a business line and other firms looking to scale up. We are good at “x” so let’s make “x” bigger. We aren’t that great at “y” so let’s sell it and use that money somewhere else.
Well I worked at a few mutual fund companies, and a common belief was their acumen in research at most firms, risk management at one of them. Another common belief was that operations was something messy to be outsourced where possible. Often they went too far with outsourcing things that should not be outsourced. But 401k admin is separate enough from everything else (as is shareholder record keeping) that it is easy to outsource to another scale player. An operations exec who wants such business is a different animal, and there are firms that do focus on such things (like State Street, BNY Mellon etc).
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Re: Vanguard to Exit Individual 401(k), Multi-SEP, and SIMPLE IRA Plans With Ascensus Deal

Post by vnatale »

CFM300 wrote: Wed Apr 17, 2024 5:16 pm Has anyone received a direct notice from Vanguard? I haven't, which I find strange and unprofessional.
I have not and agree with your judgement regarding Vanguard.
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Re: Vanguard to Exit Individual 401(k), Multi-SEP, and SIMPLE IRA Plans With Ascensus Deal

Post by JoeNJ28 »

vnatale wrote: Wed Apr 17, 2024 8:10 pm
CFM300 wrote: Wed Apr 17, 2024 5:16 pm Has anyone received a direct notice from Vanguard? I haven't, which I find strange and unprofessional.
I have not and agree with your judgement regarding Vanguard.
The deal was just announced did you want a letter ahead of time saying we may be getting out of this business?
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Re: Vanguard to Exit Individual 401(k), Multi-SEP, and SIMPLE IRA Plans With Ascensus Deal

Post by terran »

Unfortunate seeing one of the big brokerages dropping their solo 401(k), hopefully the others don't start to do the same. Vanguard was my backup if the Morgan Stanley starts messing with my E*Trade solo 401(k). On the other hand, it's good to see that Schwab has added a Roth option. Does anyone know if Schwab offers in plan traditional to Roth conversions (E*Trade does).
bsteiner wrote: Wed Apr 17, 2024 2:21 pm Someone just set up an individual 401(k) plan at Vanguard but didn't yet put any money into it. To avoid the new fees, how would she close the Vanguard plan (and set one up at Fidelity)? Or can she just ignore it and set one up at Fidelity?

If the Vanguard plan is plan 001, would the Fidelity plan be 001 (since she never used the Vanguard plan) or 002? Would it matter whether she closed the Vanguard plan or just let it sit?
She would need to amend the plan to the new custodian and close the accounts (importantly, not close the plan). Since she hasn't contributed she wouldn't need to transfer the accounts. When I moved mine from Fidelity to E*Trade I was told not to increment the plan number because I was amending the existing plan, not starting a new plan. You don't want to close and reopen because, as I understand it, there's a waiting period (2 years, maybe?) to do so.
Leesbro63 wrote: Wed Apr 17, 2024 4:26 pm Someone mentioned rolling a Solo 401(k) into an IRA. What would be any disadvantage to this, other than going forward, you'll still need a Solo 401(k) for new yearly contributions?
In addition to the backdoor Roth issues already mentioned, unless the plan allowed in service withdrawals (I don't think any of the off the shelf providers do), you'd need to close the plan to roll over to an IRA. My understanding is that there's a waiting period to open a new solo 401(k) (2 years, maybe?) after closing one.
sailaway wrote: Wed Apr 17, 2024 5:04 pm
Leesbro63 wrote: Wed Apr 17, 2024 4:26 pm Someone mentioned rolling a Solo 401(k) into an IRA. What would be any disadvantage to this, other than going forward, you'll still need a Solo 401(k) for new yearly contributions?
Loss of ERISA and complicating backdoor Roth: the same issues whenever you rollover from a 401k to IRA.
My understanding is that solo 401(k)s don't have ERISA protection.
CFM300
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Re: Vanguard to Exit Individual 401(k), Multi-SEP, and SIMPLE IRA Plans With Ascensus Deal

Post by CFM300 »

JoeNJ28 wrote: Wed Apr 17, 2024 8:19 pm The deal was just announced did you want a letter ahead of time saying we may be getting out of this business?
I don't need a letter, an email would be fine. And I don't need it ahead of time, but at the same time would have been nice.

They put out a press release and updated their website, but haven't bothered to notify clients. If personal finance weren't a hobby of mine, I wouldn't be reading Bogleheads and still wouldn't know. And the three month clock to transfer assets is ticking...

As I said, unprofessional.
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Re: Vanguard to Exit Individual 401(k), Multi-SEP, and SIMPLE IRA Plans With Ascensus Deal

Post by RickBoglehead »

Had solo 401k with Vanguard for years. Ended up rolling into IRA, got tired of the "we can't" answers and non-Admiral funds. They actually put me in some Admiral non-index funds then many months later said "oops".
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Re: Vanguard to Exit Individual 401(k), Multi-SEP, and SIMPLE IRA Plans With Ascensus Deal

Post by beyou »

As Vanguard just announced they are getting out of the 401k business probably best to leave them out of your search for a new broker.
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Re: Vanguard to Exit Individual 401(k), Multi-SEP, and SIMPLE IRA Plans With Ascensus Deal

Post by CalPoppy »

For those with experience using firms other than Vanguard for i401k plans, how helpful are they with filing 5500?
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Transfer Individual / solo 401k transfer from Vanguard Ascensus

Post by hunnypuppy »

[Thread merged into here --admin LadyGeek]

So it looks like Vanguard has sold the solo 401k business admin to Ascensus and now Ascensus is charging $20 per fund + $20 per account per year. That's a lot of fees for a my small 401k (up from $0 - thank you Vanguard, so much for your low cost investing).

I have both a Roth and regular solo 401k with Vanguard for my LLC. What I'm trying to figure out is:
1. What other options do I have for a Solo 401k (not looking at IRAs) - are there any other $0 solo 401k providers out there?
2. More importantly, how do I transfer my Solo 401k (and Solo Roth 401k) to a new brokerage/administrator/provider? Do I need to create a new plan, can I amend / carryover my Vanguard plan? Step by step guidance and potential pitfalls would be much appreciated and I've read on this forum that one cannot close and reopen Solo 401k plans.

TIA!
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Re: Transfer Individual / solo 401k transfer from Vanguard Ascensus

Post by Elysium »

Move to Fidelity. That's what I plan to do, not just for my Solo 401K, but eventually my entire portfolio. I've been quietly discontent with Vanguard for number of reasons piling up, but haven't had forcing reasons to switch. Although the plan to move eventually on retirement was always coming. This is another nail. You'd think they'll have the courtesy to inform us Individual 401K holders before the news hit media like this, but they don't care. OTOH, I will wait until the move happens and see what the new plan offers, who knows there's chance they are better than Vanguard in small biz plans. As such Vanguard plan is very limited, and the new administrator may offer something better. After that I will eventually move everything to Fidelity upon retirement in about 5 years.

Vanguard small business retirement plans moving to Ascensus
Last edited by Elysium on Thu Apr 18, 2024 7:06 am, edited 3 times in total.
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Re: Transfer Individual / solo 401k transfer from Vanguard Ascensus

Post by HomeStretch »

Brokerages that offer Solo 401k plans that allow Roth elective deferrals include Schwab and E*TRADE. Fidelity’s plan does not allow Roth.

To move your current plan to a new provider you want to amend your plan. To do this you:

1) complete a plan adoption agreement at the new provider. Select “amendment” and not “new plan”. Keep the plan # (for example, “001”) the same as your current plan.

2) complete a transfer form at the new provider to have all plan assets transferred directly from the old provider to the new provider. Check after month-end for dividend deposits, etc. to make sure the old account balances are $0.

If you must file a 2024 annual Form 5500-EZ, print the 2024 statements from both providers and combine the activity for reporting purposes.
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Re: Vanguard to Exit Individual 401(k), Multi-SEP, and SIMPLE IRA Plans With Ascensus Deal

Post by retiringwhen »

This announcement is just another in a long line that are solid evidence that the Investment Management business is becoming completely commoditized and driven solely by costs.

Vanguard doesn't want (actually this should be read as can't) to spend the money necessary to retain a competitive product in a fairly niche market segment. They instead are selling off yet another customer facing business to focus on their core competency of fund management to those customers.

If a business cannot maintain Trillions of dollars under management, Vanguard is leaving it. Actually they have already left most of them: 403b, Annuities, now solo 401k, etc.

If it is not a large MegaCorp 401K plan or a retail brokerage with significant assets, it just may be gone soon.

My prediction? The next one to go will be 529 plans.

I wonder out loud if in the end we see banks become more and more the source of retail investment services. Chase, BOA, Citi, Ally are all trying to get there.
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Re: Vanguard to Exit Individual 401(k), Multi-SEP, and SIMPLE IRA Plans With Ascensus Deal

Post by RoadRat »

Are they exiting the regular IRA business as well? I'm confused by the word "simple IRA" and not sure if that is referring to a regular iRA
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Re: Vanguard to Exit Individual 401(k), Multi-SEP, and SIMPLE IRA Plans With Ascensus Deal

Post by terran »

RoadRat wrote: Thu Apr 18, 2024 7:42 am Are they exiting the regular IRA business as well? I'm confused by the word "simple IRA" and not sure if that is referring to a regular iRA
No, a SIMPLE IRA is another type of small business retirement account.
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Re: Vanguard to Exit Individual 401(k), Multi-SEP, and SIMPLE IRA Plans With Ascensus Deal

Post by RoadRat »

terran wrote: Thu Apr 18, 2024 7:44 am
RoadRat wrote: Thu Apr 18, 2024 7:42 am Are they exiting the regular IRA business as well? I'm confused by the word "simple IRA" and not sure if that is referring to a regular iRA
No, a SIMPLE IRA is another type of small business retirement account.
Thank you
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Re: Vanguard to Exit Individual 401(k), Multi-SEP, and SIMPLE IRA Plans With Ascensus Deal

Post by retiringwhen »

RoadRat wrote: Thu Apr 18, 2024 7:42 am Are they exiting the regular IRA business as well? I'm confused by the word "simple IRA" and not sure if that is referring to a regular iRA
No. SIMPLE IRA is a form of small business retirement plan.

Retail (consumer/personal) IRAs are not impacted. They are unlikely to be on the chopping block as Vanguard literally has several trillion dollars in consumer IRAs. When Vanguard leaves regular IRAs, they will have completely exited the consumer marketplace. Not impossible, but unlikely in the short run.
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Re: Vanguard to Exit Individual 401(k), Multi-SEP, and SIMPLE IRA Plans With Ascensus Deal

Post by nisiprius »

"The transaction is expected to close in the third quarter of 2024." Meaning about four months' notice?

Like Stephen King says ironically in his novels when there are consecutive horrors, "the hits just keep on coming."

I'm giving more and more credence to the forum posters who suggest that Vanguard's medium-range plan is to eliminate all retail services.

Vanguard Brokerage Services was once operated by a third party, Pershing, under a Vanguard badge. (I always thought I could tell a difference in accent and demeanor between "Vanguard Brokerage Services" reps and regular "Vanguard" reps). It was a great big deal and a giant strategic move when Vanguard decided to bring the brokerage operations in-house, circa 2010, I think? Definitely before 2011. They could certainly outsource it again. It would ironic if it turned out to be Pershing again.

No need to do anything at all, certainly not on the basis of guesswork about the future, until it actually affects me.
Last edited by nisiprius on Thu Apr 18, 2024 8:21 am, edited 1 time in total.
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Re: Vanguard to Exit Individual 401(k), Multi-SEP, and SIMPLE IRA Plans With Ascensus De

Post by Merionman »

My former employer’s 401K plan, The Westinghouse 401K plan, transitioned to the CBS 401K plan years ago, then to the Audacy 401K plan which it is today.

At some point the plan moved from another custodian/administrator, I do not remember who, to Vanguard, the current custodian/administrator.

I thought that was fine as my personal investment and IRA accounts were/are with Vanguard.

So now Vanguard is selling that part of its business and with it my former employer 401K plan to Ascensus? Is that what is happening?

If so I am thinking I might be better off rolling over my 401K plan into my existing IRA’s at Vanguard, pretax money into my Traditional IRA, after tax money into my Roth IRA.

The other alternative would be to transfer the former employer 401K to my current employer’s 401K plan, which is with Fidelity. By doing this the money would not be subject to minimum required withdrawals starting next year when I turn 73, so long as I am still working and contributing to my 401K, which I am, contributing 20% of my earnings pre-tax.

Am I understanding and analyzing this development accurately?
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Re: Vanguard to Exit Individual 401(k), Multi-SEP, and SIMPLE IRA Plans With Ascensus Deal

Post by illumination »

Just more reinforcement that I made the right call leaving Vanguard.

It really just seems to me Vanguard just doesn't want to be in the retail brokerage business. If I had a Solo 401k/SEP/simple IRA with them, I'd be taking it and the rest of my accounts elsewhere. Writing is on the wall.

FWIW, I have a Solo 401k with Schwab, it's been great. No fees and great customer service.
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Re: Vanguard to Exit Individual 401(k), Multi-SEP, and SIMPLE IRA Plans With Ascensus Deal

Post by Kirby2000 »

Our minicorp moved from Fidelity to Vanguard/Ascensus for our 401k plan 15-ish years ago, and we are very happy with Ascensus. We have access to a broad lineup of Vanguard funds and ETFs at the usual (low) ERs; depending on how plan administration is set up, there may be access to non-Vanguard funds and ETFs, as well. There is a quarterly recordkeeping fee for us ($25?), but our company picks up the tab for that, probably tax-deductible as a business expense, if I had to guess. I wouldn't be thrilled to have to pay it myself, but if I got a tax deduction on it and the plan gave me good fund options, I could deal. Way cheaper than paying the ER on our old Fidelity managed 401k, for sure. And they seem pretty good as recordkeepers; as a small business or solo consultant, that is one more thing you don't want to have to deal with. The Ascensus website is....well, OK. Not as good as Fido, but fit for purpose: change investments, report on holdings, etc. We cannot download into Quicken, but we don't hold a laundry list of funds in our 401k, so I just make a manual entry twice a year; takes about five minutes a year total. I've given up expecting good banking websites nowadays.

Bonus note: Ascensus has very knowledgeable customer service available by phone, who had no problem answering our plan questions, pointing us to forms, helping us, etc.

Now that being said, I don't know how their solo 401k, etc. operation is going to work, plan options, fees, etc., or how it compares with Fido, Schwab, etc., so due diligence is certainly in order. I'll be interested in hearing about nuts and bolts comparisons, once we get some more info.

TL;DR - Very happy with Ascensus, but there may be other good options. YMMV
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