Ascensus lawsuits, BBB D- rating, poor reviews, fees and private equity

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Ret2018
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Ascensus lawsuits, BBB D- rating, poor reviews, fees and private equity

Post by Ret2018 »

Both spouse and I have individual 401k with Vanguard. I am really concerned about what I am learning about Ascensus.

There are numerous lawsuits against Ascensus. I don't have access to PACER or similar access to court records, but two that were particularly troubling are:
1) United States of America v. Ascensus, LLC and Acensus Trust Company. It's never good when DOJ is the plaintiff. Case filed in 2022 and looks like maybe settled in 2023. https://www.pacermonitor.com/public/cas ... ensus,_LLC
2) Retirement plan participant class action against Ascensus, LLC. "The agreement requires Ascensus to put up a settlement fund worth more than $2.7 million. This fund will be used to pay Class Members a large portion of the funds they had deducted from their pay but that were never deposited with the Trojan Horse plan." https://topclassactions.com/lawsuit-set ... ttlement/

I don't think I've ever seen such a bad rating (D-) at the Better Business Bureau. The complaints are worth reading.
https://www.bbb.org/us/pa/dresher/profi ... -194246057

Plan participants, employers and Ascensus employees review Ascensus poorly:
https://www.yelp.com/biz/ascensus-dresher
https://www.yelp.com/biz/futureplan-by- ... is-obispo

Fees: the plan maintenance fees have been disclosed, but what about other fees? I found this on Reddit:
"My 401k moved to Ascensus and I didn't pay attention to the emails or really think about it as it happened. Fast forward to Today(), trying to roll it into my current 401k? $375.00 fee. Vultures."
https://www.reddit.com/r/investing/comm ... _business/

And the kicker for me is, as best I can tell, as of 2021 private equity owns Ascensus:
https://riabiz.com/a/2021/5/1/ascensus- ... um-on-deal

Because we're both close to retirement (me in 2025; spouse 2027ish), we were just going to let our accounts roll to Ascensus. However, I'm very alarmed at what I've found. Hoping others have direct experience with an Ascensus individual 401k and can provide more information.
Last edited by Ret2018 on Fri May 03, 2024 5:44 am, edited 2 times in total.
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whodidntante
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Re: Acensus lawsuits, BBB D- rating, poor reviews, fees and private equity

Post by whodidntante »

Fortunately, you can easily move your solo 401ks to a lower cost provider with good customer service. It would take perhaps an hour or two to select a new provider, and all of 20 minutes to initiate the transfer. Then you can enjoy life free of Ascensus.
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southerndoc
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Re: Acensus lawsuits, BBB D- rating, poor reviews, fees and private equity

Post by southerndoc »

whodidntante wrote: Thu May 02, 2024 5:06 pm Fortunately, you can easily move your solo 401ks to a lower cost provider with good customer service. It would take perhaps an hour or two to select a new provider, and all of 20 minutes to initiate the transfer. Then you can enjoy life free of Ascensus.
What provider allows ACH contributions, has a Roth component, and doesn't charge for Vanguard fund purchases? I guess ETFs can be traded for free with most so the Vanguard fund requirement isn't a must.
Geologist
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Re: Acensus lawsuits, BBB D- rating, poor reviews, fees and private equity

Post by Geologist »

I see nothing wrong with moving your 401k if you like, but the fact that Acensus has been sued means very little. Tell us what other providers you are considering and there is surely considerable litigation history involving them too.
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Re: Acensus lawsuits, BBB D- rating, poor reviews, fees and private equity

Post by stan1 »

Schwab paid $187M to settle a suit bought by the SEC about their low yield forced cash allocation in the Intelligent Portfolios product.
https://www.cnbc.com/2022/06/13/charles ... laims.html

Vanguard paid $6.25M to settle claims in Massachusetts about how they forced capital gains distributions to retail consumers using Target retirement funds.
https://www.barrons.com/advisor/article ... 1657222182

They are businesses, they all get sued and end up paying out when they lose. They are not charities or family members.
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Re: Acensus lawsuits, BBB D- rating, poor reviews, fees and private equity

Post by JBTX »

The experience we have had with 2 different small company 401ks through ascensus has been fine for us. I had no idea these other issues were out there.
gtwhitegold
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Re: Acensus lawsuits, BBB D- rating, poor reviews, fees and private equity

Post by gtwhitegold »

southerndoc wrote: Thu May 02, 2024 5:59 pm
whodidntante wrote: Thu May 02, 2024 5:06 pm Fortunately, you can easily move your solo 401ks to a lower cost provider with good customer service. It would take perhaps an hour or two to select a new provider, and all of 20 minutes to initiate the transfer. Then you can enjoy life free of Ascensus.
What provider allows ACH contributions, has a Roth component, and doesn't charge for Vanguard fund purchases? I guess ETFs can be traded for free with most so the Vanguard fund requirement isn't a must.
My Solo 401k account is through E*Trade. They offer some Vanguard funds and a Roth option. It's not perfect, but if you're afraid of Ascensus, then it's definitely an option.
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Ret2018
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Re: Acensus lawsuits, BBB D- rating, poor reviews, fees and private equity

Post by Ret2018 »

stan1 wrote: Thu May 02, 2024 6:29 pm Schwab paid $187M to settle a suit bought by the SEC about their low yield forced cash allocation in the Intelligent Portfolios product.
https://www.cnbc.com/2022/06/13/charles ... laims.html

Vanguard paid $6.25M to settle claims in Massachusetts about how they forced capital gains distributions to retail consumers using Target retirement funds.
https://www.barrons.com/advisor/article ... 1657222182

They are businesses, they all get sued and end up paying out when they lose. They are not charities or family members.
To me, there's a qualitative difference between those issues and outright fraud--ie, taking plan participant money and not depositing in the account.
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Ret2018
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Re: Acensus lawsuits, BBB D- rating, poor reviews, fees and private equity

Post by Ret2018 »

whodidntante wrote: Thu May 02, 2024 5:06 pm Fortunately, you can easily move your solo 401ks to a lower cost provider with good customer service. It would take perhaps an hour or two to select a new provider, and all of 20 minutes to initiate the transfer. Then you can enjoy life free of Ascensus.
I'm trying to figure that out now. As I said, the original plan was to just go with the Ascensus transfer, but now I'm not so sure.

Has anyone gotten from Ascensus a list of fees besides the annual maintenance fees?
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Re: Acensus lawsuits, BBB D- rating, poor reviews, fees and private equity

Post by eigenperson »

Ret2018 wrote: Fri May 03, 2024 5:48 amTo me, there's a qualitative difference between those issues and outright fraud--ie, taking plan participant money and not depositing in the account.
Ascensus was not really accused of fraud in that lawsuit. The employers allegedly deducted money from their employees' pay, but did not contribute it to the 401(k). Ascensus was accused, essentially, of failing to stop them from doing that, thus allegedly violating their fiduciary duty. (Of course the employers were sued too.)

Whether Ascensus adequately oversees plan sponsors to ensure they follow the law is probably not relevant to you if you open an individual 401(k).
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AllMostThere
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Re: Ascensus lawsuits, BBB D- rating, poor reviews, fees and private equity

Post by AllMostThere »

IMHO, while some have indicated that being sued in nothing out of the ordinally in today's environment, I view the BBB rating of "D-" as more concerning. While past performance is not an indicator of future performance, I would view this poor rating as a warning sign of future poor customer service. If this was an annuity company with a poor S&P rating, we would all be screaming to the moon to avoid. Shame on Vanguard for not performing more due diligence on a potential suitor for these accounts. Total disregard for the customer experience. What does that tell you? :annoyed
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Re: Ascensus lawsuits, BBB D- rating, poor reviews, fees and private equity

Post by hsohr »

I am a physician. I had my Cash Balance Plan and individual 401(k) plan with Ascensus. Absolutely incompetent and unresponsive. An extremely terrible experience with them. I would NEVER, NEVER, EVER, NEVER, even think about letting them be my plan administrator again. Subsequently, I interviewed about 15 plan administrators and selected one in Oregon, which I have been extremely happy about. By the way, as you have figured out by now, I am currently working on moving my 401(k) plan out of Vanguard and into Fidelity.
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Re: Ascensus lawsuits, BBB D- rating, poor reviews, fees and private equity

Post by beyou »

AllMostThere wrote: Fri May 03, 2024 7:27 am IMHO, while some have indicated that being sued in nothing out of the ordinally in today's environment, I view the BBB rating of "D-" as more concerning. While past performance is not an indicator of future performance, I would view this poor rating as a warning sign of future poor customer service. If this was an annuity company with a poor S&P rating, we would all be screaming to the moon to avoid. Shame on Vanguard for not performing more due diligence on a potential suitor for these accounts. Total disregard for the customer experience. What does that tell you? :annoyed
Maybe so, but I took a quick look and as expected, the first complaint on the link provided above was in reference to 401k rollover to IRA.
I don't think anyone is ever happy with that process, as it is by design inefficient. AFAIL all 401k plans will liquidate holdings and MAIL you one of the largest checks you will ever receive (or mail to your new provider). Either way, it is somewhat unsettling to have that much of your savings in transit by the USPS which regularly delays/loses/destroys mail. My 401k admin was Voya the rollover process was terrible there too. But they were helpful and friendly before my rollover.

In the case of Ascensus, they were our state 529 plan admin and my experience with them was excellent.
That said 401k and 529 are different enough a firm can have one run well and another poorly.
Just saying that few interact with 401k admins and when you do it's mainly to rollover outbound which is a manual process everywhere.
I can't imagine there would be excellent reviews of any 401k admin, at least not based on the actual 401k admin itself (vs the funds or other accounts outside the 401k).
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Re: Ascensus lawsuits, BBB D- rating, poor reviews, fees and private equity

Post by hsohr »

beyou wrote: Fri May 24, 2024 6:21 pm
AllMostThere wrote: Fri May 03, 2024 7:27 am IMHO, while some have indicated that being sued in nothing out of the ordinally in today's environment, I view the BBB rating of "D-" as more concerning. While past performance is not an indicator of future performance, I would view this poor rating as a warning sign of future poor customer service. If this was an annuity company with a poor S&P rating, we would all be screaming to the moon to avoid. Shame on Vanguard for not performing more due diligence on a potential suitor for these accounts. Total disregard for the customer experience. What does that tell you? :annoyed
Maybe so, but I took a quick look and as expected, the first complaint on the link provided above was in reference to 401k rollover to IRA.
I don't think anyone is ever happy with that process, as it is by design inefficient. AFAIL all 401k plans will liquidate holdings and MAIL you one of the largest checks you will ever receive (or mail to your new provider). Either way, it is somewhat unsettling to have that much of your savings in transit by the USPS which regularly delays/loses/destroys mail. My 401k admin was Voya the rollover process was terrible there too. But they were helpful and friendly before my rollover.

In the case of Ascensus, they were our state 529 plan admin and my experience with them was excellent.
That said 401k and 529 are different enough a firm can have one run well and another poorly.
Just saying that few interact with 401k admins and when you do it's mainly to rollover outbound which is a manual process everywhere.
I can't imagine there would be excellent reviews of any 401k admin, at least not based on the actual 401k admin itself (vs the funds or other accounts outside the 401k).
I can tell you that year after year, the numbers that they gave us, as far as contributions to 401k and Cash Balance Plan (CBP) were wrong. In fact, their mistakes caused SIGNIFICANT errors in my taxes and contributions costing me a couple of hundred thousand dollars. For 2 separate years, my accountant had to amend my tax filings. They were getting increasingly late with all their communications and projections, every year giving me the documents that I needed later and later. They kept changing the representative that was assigned to my case. They were late and rude in responding to our emails. They are incompetent. It was a horror show. Feel free to reply here or message me privately if you wish to ask more questions.
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Re: Ascensus lawsuits, BBB D- rating, poor reviews, fees and private equity

Post by sink »

I am in the middle of moving my Individ. 401k from Vanguard to Schwab, before Vanguard sends it to Ascensus. I have to tell you, the transfer
process is NOT EASY. The form and paperwork at Schwab are not easy at all. There's 4 different forms, 15 pages of tedious questions that I am not sure how to answer. I have followed the online process at Schwab and just hope it goes through soon. I will be glad when it is over. After completing the 15 page form at Schwab I had to also fill out another 5 page transfer form that has to be mailed snail mail to a Florida Schwab address. I would really think Schwab would make this process seamless for all the people trying to avoid the Ascensus purchase, but I can tell Schwab is not. It can only
be that Schwab doesnt want these accounts anymore than Vanguard. They must not be too profitable to host - Indiv 401k plans. If I knew it would be this hard I probably would have let Vanguard send it to Ascensus and hope for the best.
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Re: Acensus lawsuits, BBB D- rating, poor reviews, fees and private equity

Post by White Coat Investor »

whodidntante wrote: Thu May 02, 2024 5:06 pm Fortunately, you can easily move your solo 401ks to a lower cost provider with good customer service. It would take perhaps an hour or two to select a new provider, and all of 20 minutes to initiate the transfer. Then you can enjoy life free of Ascensus.
Exactly. I get people's need to vent, but this is an awfully easy "problem" to solve.

Personally, I think the new best option for most is a customized solo 401(k). Not free, but way less hassle and tons more options. I suspect most will want one of them. I've used several options available only with a customized plan. So much so that when we went from a solo 401(k) to an ERISA 401(k) we did all we could to keep those features in the plan. Our employees now refer to it as the "World's Best 401(k)" and for several of them, the majority of their compensation goes into it.
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Re: Acensus lawsuits, BBB D- rating, poor reviews, fees and private equity

Post by Tenesmus83 »

White Coat Investor wrote: Sat May 25, 2024 11:35 am
whodidntante wrote: Thu May 02, 2024 5:06 pm Fortunately, you can easily move your solo 401ks to a lower cost provider with good customer service. It would take perhaps an hour or two to select a new provider, and all of 20 minutes to initiate the transfer. Then you can enjoy life free of Ascensus.
Exactly. I get people's need to vent, but this is an awfully easy "problem" to solve.

Personally, I think the new best option for most is a customized solo 401(k). Not free, but way less hassle and tons more options. I suspect most will want one of them. I've used several options available only with a customized plan. So much so that when we went from a solo 401(k) to an ERISA 401(k) we did all we could to keep those features in the plan. Our employees now refer to it as the "World's Best 401(k)" and for several of them, the majority of their compensation goes into it.
what companies offer these customized solo 401ks?
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Re: Acensus lawsuits, BBB D- rating, poor reviews, fees and private equity

Post by southerndoc »

Tenesmus83 wrote: Fri Jun 14, 2024 7:22 pm
White Coat Investor wrote: Sat May 25, 2024 11:35 am
whodidntante wrote: Thu May 02, 2024 5:06 pm Fortunately, you can easily move your solo 401ks to a lower cost provider with good customer service. It would take perhaps an hour or two to select a new provider, and all of 20 minutes to initiate the transfer. Then you can enjoy life free of Ascensus.
Exactly. I get people's need to vent, but this is an awfully easy "problem" to solve.

Personally, I think the new best option for most is a customized solo 401(k). Not free, but way less hassle and tons more options. I suspect most will want one of them. I've used several options available only with a customized plan. So much so that when we went from a solo 401(k) to an ERISA 401(k) we did all we could to keep those features in the plan. Our employees now refer to it as the "World's Best 401(k)" and for several of them, the majority of their compensation goes into it.
what companies offer these customized solo 401ks?
Employee Fudiciary is one. You have to use Schwab and they're probably one of the more reasonably priced TPAs. They charge an annual fee, plus additional fees for services, plus an AUM fee (I think 0.3% if I'm not mistaken).
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White Coat Investor
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Re: Acensus lawsuits, BBB D- rating, poor reviews, fees and private equity

Post by White Coat Investor »

Tenesmus83 wrote: Fri Jun 14, 2024 7:22 pm
White Coat Investor wrote: Sat May 25, 2024 11:35 am
whodidntante wrote: Thu May 02, 2024 5:06 pm Fortunately, you can easily move your solo 401ks to a lower cost provider with good customer service. It would take perhaps an hour or two to select a new provider, and all of 20 minutes to initiate the transfer. Then you can enjoy life free of Ascensus.
Exactly. I get people's need to vent, but this is an awfully easy "problem" to solve.

Personally, I think the new best option for most is a customized solo 401(k). Not free, but way less hassle and tons more options. I suspect most will want one of them. I've used several options available only with a customized plan. So much so that when we went from a solo 401(k) to an ERISA 401(k) we did all we could to keep those features in the plan. Our employees now refer to it as the "World's Best 401(k)" and for several of them, the majority of their compensation goes into it.
what companies offer these customized solo 401ks?
I keep a list, most of which doesn't pay me but some of which does, so it wouldn't be appropriate to share it here and of course I'm not allowed to link to it. But there are at least 5-10 of these kind of boutique companies.
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Re: Ascensus lawsuits, BBB D- rating, poor reviews, fees and private equity

Post by SeekValue2021 »

sink wrote: Sat May 25, 2024 11:31 am I am in the middle of moving my Individ. 401k from Vanguard to Schwab, before Vanguard sends it to Ascensus. I have to tell you, the transfer
process is NOT EASY. The form and paperwork at Schwab are not easy at all. There's 4 different forms, 15 pages of tedious questions that I am not sure how to answer. I have followed the online process at Schwab and just hope it goes through soon. I will be glad when it is over. After completing the 15 page form at Schwab I had to also fill out another 5 page transfer form that has to be mailed snail mail to a Florida Schwab address. I would really think Schwab would make this process seamless for all the people trying to avoid the Ascensus purchase, but I can tell Schwab is not. It can only
be that Schwab doesnt want these accounts anymore than Vanguard. They must not be too profitable to host - Indiv 401k plans. If I knew it would be this hard I probably would have let Vanguard send it to Ascensus and hope for the best.
How long did it take start to finish in the move to Schwab? I started down that road and found Schwab not to be user friendly so I have paused.
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