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.

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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). :?

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

Post by dlong » Thu Mar 01, 2018 6:58 pm

Alan S. wrote:
Mon Feb 12, 2018 9:54 pm
You did not include any dollar amounts for the 5 categories you listed, but does your statement?
Yes, each of the 5 categories have funds inside them and each with a dollar amount. Example: https://drive.google.com/uc?export=&id= ... IQ8Vdg2Vjd
Alan S. wrote:
Mon Feb 12, 2018 9:54 pm
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.
I did not realize (until recently but after posting this thread) about not being able to roll-in Roth IRA balances to 401k (saw the chart in the Wiki that was taken from the IRA website). Thanks.
Alan S. wrote:
Mon Feb 12, 2018 9:54 pm
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.
I just did the math, it looks like, with the exception of the Roth In Plan Conversion category, the same fund in each category is currently approximately the same percentage across each category. The exception is because I manually do the after-tax to Roth conversion each pay check. Then manually exchange it from the Money Market to one (randomly chosen) of the 5 already invested funds. However, it does look like I am allow to manually exchange each fund in each category to a different fund in the same category. So while the system doesn't allow me to set my different contributions per source to different funds, it allows me to move them after the contributions have been added to the account.

Alan S. wrote:
Mon Feb 12, 2018 9:54 pm
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.
:?: On a very similar line of thought that I was thinking of questioning by starting on a new thread: My wife has two IRA accounts, one of the IRA has mixed money (individual contributions mixed in with Rollover money -- a mistake that I made just this year that Vanguard won't fix even through it is partly their fault). Anyway, it looks like her 401k plan at Principal may allow her to roll-in Rollover IRA and tIRA. And it will also allow an in-service withdrawal of any rolled in monies at any time. I am waiting confirmation on both aspects.

I wonder if it would be worth it or more importantly, if it will work as I think it will, to roll both accounts (~110k) into her 401k at Principal. Wait a month some minimum period, if any, and then roll it out, back to Vanguard as a single Rollover IRA (the goal). And hopefully only pay one quarter of 0.6% (=.15%) of "management fee".

Thoughts?

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Re: How Are Rollovers Represented in Vanguard 401k?

Post by retiringwhen » Thu Mar 01, 2018 7:12 pm

My 401(K) Source of Contribution look very similar to yours for a MegaCorp plan administered by Vanguard.

I did a pre-tax rollover into my 401(K) - custodian to custodian all within Vanguard.

Those funds show up under the "Source of Contribution" titled "ROLLOVER ACCOUNT"

Does that help?

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Re: How Are Rollovers Represented in Vanguard 401k?

Post by Alan S. » Thu Mar 01, 2018 7:57 pm

dlong wrote:
Thu Mar 01, 2018 6:58 pm

:?: On a very similar line of thought that I was thinking of questioning by starting on a new thread: My wife has two IRA accounts, one of the IRA has mixed money (individual contributions mixed in with Rollover money -- a mistake that I made just this year that Vanguard won't fix even through it is partly their fault). Anyway, it looks like her 401k plan at Principal may allow her to roll-in Rollover IRA and tIRA. And it will also allow an in-service withdrawal of any rolled in monies at any time. I am waiting confirmation on both aspects.

I wonder if it would be worth it or more importantly, if it will work as I think it will, to roll both accounts (~110k) into her 401k at Principal. Wait a month some minimum period, if any, and then roll it out, back to Vanguard as a single Rollover IRA (the goal). And hopefully only pay one quarter of 0.6% (=.15%) of "management fee".

Thoughts?
Yes, you could "whitewash" your commingled IRAs by rolling them into the 401k (if acceptable to the 401k), and then rolling them back out to a rollover IRA. They would then be exclusively rollover IRA accounts.

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

Post by dlong » Fri Mar 02, 2018 12:53 pm

retiringwhen wrote:
Thu Mar 01, 2018 7:12 pm
My 401(K) Source of Contribution look very similar to yours for a MegaCorp plan administered by Vanguard.

I did a pre-tax rollover into my 401(K) - custodian to custodian all within Vanguard.

Those funds show up under the "Source of Contribution" titled "ROLLOVER ACCOUNT"

Does that help?
Thanks that does help. Did you roll multiple IRAs into the Vanguard 401k? Regardless, I'll know the result soon as I have already initiated rolling three IRAs into my Vanguard 401k.

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Re: How Are Rollovers Represented in Vanguard 401k?

Post by KSActuary » Fri Mar 02, 2018 1:07 pm

Rollovers require separate accounting in 401k plans because they can have different payout options. For example, a rollover can be distributed back out of a plan under most circumstances.

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Re: How Are Rollovers Represented in Vanguard 401k?

Post by retiringwhen » Fri Mar 02, 2018 9:23 pm

dlong wrote:
Fri Mar 02, 2018 12:53 pm
Thanks that does help. Did you roll multiple IRAs into the Vanguard 401k? Regardless, I'll know the result soon as I have already initiated rolling three IRAs into my Vanguard 401k.
I rolled a single Vanguard Rollover IRA into the 401(K). The IRA was comprised of 7 Vanguard mutual funds that were turned into cash, then transferred and allocated as per the rollover form in the 401(K). The rollover was part of my simplification effort so i ended up in just 4 funds to simulate the 3-fund portfolio (500 Index + Extended Index = TSM)

I have not rolled any other IRA's into the 401(K).

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

Post by dlong » Mon Mar 05, 2018 7:04 pm

Well, the money disappeared from three of my Vanguard IRAs on Friday (3/2/2018)... I am waiting for it to reappear in my Vanguard 401k... I was hoping to see it close of business (COB) today (Monday, 3/5/2018), but nada. :annoyed

I would think that it is all electronic, going from Vanguard to Vanguard so that it takes one day to sell (COB Friday) and one day to buy (COB Monday).

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Re: How Are Rollovers Represented in Vanguard 401k?

Post by retiringwhen » Mon Mar 05, 2018 7:20 pm

dlong wrote:
Mon Mar 05, 2018 7:04 pm
Well, the money disappeared from three of my Vanguard IRAs on Friday (3/2/2018)... I am waiting for it to reappear in my Vanguard 401k... I was hoping to see it close of business (COB) today (Monday, 3/5/2018), but nada. :annoyed

I would think that it is all electronic, going from Vanguard to Vanguard so that it takes one day to sell (COB Friday) and one day to buy (COB Monday).
When I did it, the rep told me they actually have to cut a check as it is custodian to custodian transfer as the 401(K) is not actually Vanguard, it is the MEgeCorp that is the custodian, vanguard is just the administrator.

BTW, I was out of the market 1 day. Similarly, I did a transfer on Friday, and it got credited on the closing price of Tuesday.

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Re: How Are Rollovers Represented in Vanguard 401k?

Post by dlong » Wed Mar 07, 2018 6:34 pm

retiringwhen wrote:
Mon Mar 05, 2018 7:20 pm
When I did it, the rep told me they actually have to cut a check as it is custodian to custodian transfer as the 401(K) is not actually Vanguard, it is the MEgeCorp that is the custodian, vanguard is just the administrator.

BTW, I was out of the market 1 day. Similarly, I did a transfer on Friday, and it got credited on the closing price of Tuesday.
Looks like today, the monies showed up. It's now "received - processing (1-2 days)'. :)

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Re: How Are Rollovers Represented in Vanguard 401k?

Post by whodidntante » Wed Mar 07, 2018 6:40 pm

How Are Rollovers Represented in Vanguard 401k?
A Vanguard 401k rollover is usually represented as a failure of customer service, resulting in frustrated owners coming to a third-party website for support.

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Re: How Are Rollovers Represented in Vanguard 401k?

Post by retiringwhen » Wed Mar 07, 2018 6:48 pm

dlong wrote:
Wed Mar 07, 2018 6:34 pm
retiringwhen wrote:
Mon Mar 05, 2018 7:20 pm
When I did it, the rep told me they actually have to cut a check as it is custodian to custodian transfer as the 401(K) is not actually Vanguard, it is the MEgeCorp that is the custodian, vanguard is just the administrator.

BTW, I was out of the market 1 day. Similarly, I did a transfer on Friday, and it got credited on the closing price of Tuesday.
Looks like today, the monies showed up. It's now "received - processing (1-2 days)'. :)
Almost home!

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Re: How Are Rollovers Represented in Vanguard 401k?

Post by dlong » Thu Mar 08, 2018 1:34 pm

I am transferring a total of 6 funds in 3 accounts (funds in each account: 3,2,1). So...when I filled out the form, one form for each account, I had checked "ALL in account" instead of listing individual funds/accounts. Even so, apparently 6 checks were cut, one for each fund rather than one for each account. The checks are and moved from one department to another (as stated by the Vanguard 401k agent) rather than electronic. However, due to the storm 'yesterday' (as stated by the agent), only 5 showed up and was processed, one has not yet been received but sent (401k agent talked to the retail side). Additionally, 2 of the checks from two different accounts were merged before being deposited. Vanguard 401k agent said options are to wait or cancel check and then repeat with rollover. I'm going to wait a few days and see what happens.


As for the "How Are [sic: Multiple] Rollovers Represented in Vanguard 401k?" question The answer is as a single account called "ROLLOVER ACCOUNT". They deposited all the monies into that single account. There also seems to be a new "source" account called: COMPANY CNTRB TRANSFER ACCT with a balance of 0.

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Re: How Are Rollovers Represented in Vanguard 401k?

Post by retiringwhen » Thu Mar 08, 2018 2:46 pm

dlong wrote:
Thu Mar 08, 2018 1:34 pm
I am transferring a total of 6 funds in 3 accounts (funds in each account: 3,2,1). So...when I filled out the form, one form for each account, I had checked "ALL in account" instead of listing individual funds/accounts. Even so, apparently 6 checks were cut, one for each fund rather than one for each account. The checks are and moved from one department to another (as stated by the Vanguard 401k agent) rather than electronic. However, due to the storm 'yesterday' (as stated by the agent), only 5 showed up and was processed, one has not yet been received but sent (401k agent talked to the retail side). Additionally, 2 of the checks from two different accounts were merged before being deposited. Vanguard 401k agent said options are to wait or cancel check and then repeat with rollover. I'm going to wait a few days and see what happens.


As for the "How Are [sic: Multiple] Rollovers Represented in Vanguard 401k?" question The answer is as a single account called "ROLLOVER ACCOUNT". They deposited all the monies into that single account. There also seems to be a new "source" account called: COMPANY CNTRB TRANSFER ACCT with a balance of 0.
Since my IRA was not a brokerage, they did the same, They transferred 8 different checks and funds. I also got 8 1099-R rollover forms as well. That is because they are actually different accounts.

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Re: How Are Rollovers Represented in Vanguard 401k?

Post by dlong » Wed Mar 14, 2018 11:52 am

Finally! Vanguard received the final 'check' on Monday and it was 'processed' and completed on Tuesday COB.

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Re: How Are Rollovers Represented in Vanguard 401k?

Post by retiringwhen » Wed Mar 14, 2018 1:03 pm

dlong wrote:
Wed Mar 14, 2018 11:52 am
Finally! Vanguard received the final 'check' on Monday and it was 'processed' and completed on Tuesday COB.
whew, now you can sleep, i know that feeling (not as long though...)

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Re: How Are Rollovers Represented in Vanguard 401k?

Post by dlong » Wed Mar 14, 2018 1:15 pm

retiringwhen wrote:
Wed Mar 14, 2018 1:03 pm
dlong wrote:
Wed Mar 14, 2018 11:52 am
Finally! Vanguard received the final 'check' on Monday and it was 'processed' and completed on Tuesday COB.
whew, now you can sleep, i know that feeling (not as long though...)
I don't understand how these things aren't being done by ACH or something similar. Not to mention, this is from one side of Vanguard to the other; even if they are separate entities (I don't know if they are); you would think they would make it so that it's not so manual (aka more costs).

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Re: How Are Rollovers Represented in Vanguard 401k?

Post by retiringwhen » Wed Mar 14, 2018 1:24 pm

dlong wrote:
Wed Mar 14, 2018 1:15 pm
retiringwhen wrote:
Wed Mar 14, 2018 1:03 pm
dlong wrote:
Wed Mar 14, 2018 11:52 am
Finally! Vanguard received the final 'check' on Monday and it was 'processed' and completed on Tuesday COB.
whew, now you can sleep, i know that feeling (not as long though...)
I don't understand how these things aren't being done by ACH or something similar. Not to mention, this is from one side of Vanguard to the other; even if they are separate entities (I don't know if they are); you would think they would make it so that it's not so manual (aka more costs).
I asked a similar question of my Flagship rep and his answer is that the holding banks and supporting processes for the custodian of an employer-based plan like a 401(K) are completely separate from Vanguard custodial accounts and supporting banks.

Unlike regular brokerage custodian relationships, there is no clearinghouse like ACATS to do it. so in effect the only way to move money from MegaCorp's custodian bank to the Vanguard custodian bank is a "check". BTW, I am not 100% sure it is actually a paper check, but is a manual process of some sort.

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