Shares Being Chiselled Away from 401k

[John Galt III]

Hi,

I've noticed something interesting and annoying in my 401k. I have a "Stable Return" fund, and also some Pimco Total Return there.

Every once in a while my number of shares in both of the above will drop by a very small amount, on the same day. For example, from 302.33 shares to 302.29 shares, in one day.

The shares only normally change during the weekly contributions I make when I have money deducted from my paycheck, so the change in number of shares catches my eye on other days. I track the account pretty closely.

When I check the transaction history, online, for these reductions in shares, I find an entry for "earn gain / loss " for the amount of money extracted. There is no mention of a "fee".


The amount of money I lose in each of these episodes has varied from $5 to less than $1. Almost always it is less than $2. It happens on an irregular basis. It was happening approximately once per month for 3 months, then nothing for 6 months, then it happened again yesterday.

Doesn't seem to correlate to any of my activity in the account.

I definitely don't want to call the 401K customer service clerks about it, and get bounced around all day from incompetent person A to incompetent person Z. I've called them before, about something else, and they are pretty clueless, unfortunately, no matter how long you are on hold waiting for them to "research the question".


At first, I only had the Stable Return fund, and I thought perhaps the fund was losing money, during the "financial crisis", and instead of lowering the share price, they just lowered everyone's number of shares very slightly, hoping they would not notice. Can't have a Stable Return fund decreasing in share value, now can we? Might set off a panic.


But later I added the Pimco fund, which has a volatile share price, and they are doing it to Pimco too.

Maybe it's some sort of fee. I would have thought the fees would be extracted behind the scenes, and never actually shown, but if shown, would be on a more regular basis.


Not losing any sleep over this, since it's a very small amount of money. Just wondering what's going on here. Anyone else notice their number of shares being whittled away ?

Thanks,

JG3

 

[Animorph]

I have a number of funds in my 401k that are "equivalents" of normal funds. I track them using the normal fund's symbol, but every so often I have to subtract a tiny fraction of a share to match the actual 401k holdings. I assume this is an added 401k administration expense. It was also noticeable with the company stock fund, which had a price that didn't match the stock itself. They would show "equivalent shares" and the number of shares would decline slightly with time.

That did not occur with the stable value fund however. Not much choice there but to eat shares unless they have created their own captive fund.

 

[brewer12345]

An alternative theory:

Tiny little beavers have gotten into the 401k administrator's computer and they are feeding on the shares. They are really tiny, so they don't eat much at once. They also hibernate for 3 to 6 months at a time, so that is why you see them munching on shares infrequently. I recommend you mail a few mousetraps to your 401k administrator and ask them to place the traps near your account.




(Call your administrator and ask.)

 

[John Galt III]

I have a number of funds in my 401k that are "equivalents" of normal funds. I track them using the normal fund's symbol, but every so often I have to subtract a tiny fraction of a share to match the actual 401k holdings. I assume this is an added 401k administration expense. It was also noticeable with the company stock fund, which had a price that didn't match the stock itself. They would show "equivalent shares" and the number of shares would decline slightly with time.

That did not occur with the stable value fund however. Not much choice there but to eat shares unless they have created their own captive fund.

In a different 401K of mine, they have added, last year, a $9.00 fee, for every quarter, just to have a 401k with them. The online "transaction history" clearly labels it as an "administrative fee" and the required number of shares are deducted. No sporadic, unpredictable, unexplained nibblings at the shares.

 

[John Galt III]

An alternative theory:

Tiny little beavers have gotten into the 401k administrator's computer and they are feeding on the shares. They are really tiny, so they don't eat much at once. They also hibernate for 3 to 6 months at a time, so that is why you see them munching on shares infrequently. I recommend you mail a few mousetraps to your 401k administrator and ask them to place the traps near your account.




(Call your administrator and ask.)

Brewer, Thanks. When I feel my masochistic streak flaring up, and have a few hours of time to waste, I'll give them a call.

 

[FUEGO]

My guess is fees. Mine in my 401k are always $5 a quarter, and you see the $5 charge, plus the "gain/loss" shown for whatever funds were liquidated to pay the fee. DW's 401k has quarterly fees, but I can't figure out the method of madness. They are small as well, in the order of $2-7 a quarter, and probably average $5 but they are never the same quarter to quarter. Costs of doing business I suppose.

 

[LOL!]

It is fees. Many 401(k)'s have fees that the particpants pay individually. You have the plan materials from your company, so why not read them? Don't have them? Get them from HR.

Our Fidelity plan has a $20 fee per participant. Fidelity was going to extract it at $5 per quarter from everyone's account, but the employer decided to just pay it separately for everyone.

 

[travelover]

I have read in the past that companies have no legal obligation to disclose all 401(k) fees to participants. If true, it is shameful. I know that in the company where I worked, it was hard to get any kind of an answer from anyone but a lackey with no real knowledge or responsibility.

This article from this summer alludes to the issue.

Small 401(k) Plans Often Pay Big Fees - WSJ.com