Vanguard Please Stop Nickel and Diming Me

I just got this notice from Vanguard in my latest statement:


Beginning in the first quarter of 2011, participants in all University of Virginia retirement plans will be charged an administrative fee of $12 per year. The fee will be deducted from each account on a quarterly basis. The first quarterly deduction of $3.00 will be withheld from your account balance and reflected in your first quarter statement. Please note that if you participate in more than one University of Virginia retirement plan, an annual fee will be charged for each plan.

The administrative fee covers the costs associated with record keeping, account statements, participant education, postage, and other services for the retirement plan and its participants. The administrative fee will be deducted from each of the funds in your account on a pro rata basis. For example, if a fund makes up 50% of your account balance, 50% of the fee will be deducted from that fund.

Also Vanguard who claims to have very low expense ratios also has more low balance fees than Fidelity and T Rowe Price (more details to follow in an update tomorrow). I have both a Roth IRA and all my UVA Retirement plans with Vanguard. I’m thinking of moving my UVA retirement to Fidelity and the Roth to T Rowe Price if Vanguard doesn’t do away with this new fee. Our options at UVA are Vanguard, Fidelity and TIAA CREF and Vanguard is the only one charging these new fees. Also my retirement plan is setup as three accounts and I’m sure that I’ll be charged $12 three times.

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