UPDATE: April 12th, 11:20 AM EST: About 30 minutes ago I got a call from the VP of Customer Service of ePlan Services, the agency that administers at least the online portion of my former Suntrust 401k. I am pleased to report she was very kind and I am now getting a refund of check for the $75 processing fee!
In yet another one of those signs that “I’m getting old,” I recently had the displeasure of rolling over a 401k from a former employer into my existing USAA (best bank ever) IRA account.
This was not an enjoyable process. Aside from it taking almost two weeks, when I thought the end was finally near I still had the unpleasant surprise of a $75.00 “Processing Fee.”
For a process that is almost entirely automated, you would at least think one would get good, prompt customer service.
Unfortunately, this is not the case. Its still takes FIVE business days to mail a paper check.
Want an electronic transfer? Too bad sucker, that will “cost” you another fifty bucks!
Not only is Suntrust’s fee for this common practice one of the highest in the industry, this is never explicitly declared or explained during the process of setting up the 401k.
If you research this practice online, one of the first things you will notice is Google Ads for competing banks and investments firms offering anywhere from $600 to $1,000 or more if you transfer your 401k to their bank. But don’t make the mistake I did and get excited, no more mortal can hope to outfox Wall Street at their own game .
At TD Ameritrade, in order to qualify for the $100 reward, you need to transfer at least $25,000 and keep it with them for 9 months.
The lowest minimum I saw before I quit looking was from $15,000 from Scottrade. Of course if you were unfortunate enough to trust your retirement money to the scumbags at Suntrust, this would still end up costing you 25 bucks. TO ELECTRONICALLY TRANSFER YOUR OWN MONEY!
I can only speculate, but I am willing to bet $75 that this whole scheme was thought up by some 20 something jackass, who after seeing that there wasn’t a law against it, wrote up a memo and earned him or herself a nice Christmas bonus.
So what can I / you / us do about it? On the policy / forward looking side:
- Read the fine print before committing your own $ to an employer 401k.
- If your firm is shopping around for a new investment bank, make them give you a clear breakdown of all fees in writing and negotiate!
- Complain to the banks / IRS / SEC and your local, state and federal elected officials.
- Get your money out of corporate banks and into a local or national credit union. If your lucky enough to have a veteran in your family, USAA is by far the best you can get.
Contacting your local elected officials is actually going to be your most effective approach. This is why people with money brains and no souls, such as the right-wing front group “ALEC” get their masters evil bidding done at the state level when their insane policies fail at the national level. How do you think the NRA got that ridiculous “stand your ground law” passed in Florida? In short, a law banning these type of fees at the state level would have real impact because not only would it generate news, it would make life complicated and expensive for the banks.
On the immediate gratification via ‘slacktivism’ side:
- Write your own blog posts / tweets / Facebook messages when this happens to you.
- Do Google searches and click their ads, and be happy in the satisfaction you cost them a few bucks.
- When linking to a bank website, add a question mark to the end of the normal URL, then insert a snide message for whomever managers their website analytic, as I did above for some of the links above.
This works because anything you put after a ? mark in a URL does not affect where the link is going. This is essentially the method that Google, Bing and others use to track and bill for placing ads. For example, if several thousand people were to click this link, then the poor bastard who manages Suntrust’s website (which sucks) would take notice, and be forced to include this in their weekly / monthly website analytics reports.
So in conclusion, why is this another example of the big backs sticking it to the little guy?
Well for one, if your transferring several tens of hundreds of thousands of dollars between retirement accounts, the fees and rewards are not even a blip on your radar. However if every dollar counts, these kind of completely made up ‘we just want you money’ fees are complete nonsense.