# Why do the "fees" in my 401K increase my balance? **URL:** \ **Category:** Factual Questions\ **Created:** [February 4, 2015, 3:24pm UTC](https://boards.straightdope.com/t/why-do-the-fees-in-my-401k-increase-my-balance/711807 "2015-02-04T15:24:52Z")\ **Posts on this page:** 14\ **Page:** 1
**Author:** ![Hermitian](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/hermitian/32/470_2.png) [@Hermitian](https://boards.straightdope.com/u/Hermitian)\ **Post date:** [February 4, 2015, 3:24pm UTC](https://boards.straightdope.com/t/why-do-the-fees-in-my-401k-increase-my-balance/711807/1 "2015-02-04T15:24:52Z")
My monthly 401K statement looks like this (example) Previous Balance $10,000 Your contribution: $100 Employer contribution: 100 Change in Market value: -50 Final Balance: $10,150 But everyonce in a while, it will have “fees.” But these “fees” apparently add to my balance. Everything I can find online say fees are bad and take away value. What is going on here? So it looked like this this month: Previous Balance $10,000 Your contribution: $100 Employer contribution: 100 Change in Market value: -50 Fees: $10 Final Balance: $10,160 Why do “fees” add to my balance? Does anyone have any idea what this is? ---
**Author:** ![Si\_Amigo](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/si_amigo/32/2877_2.png) [@Si\_Amigo](https://boards.straightdope.com/u/Si_Amigo)\ **Post date:** [February 4, 2015, 3:27pm UTC](https://boards.straightdope.com/t/why-do-the-fees-in-my-401k-increase-my-balance/711807/2 "2015-02-04T15:27:16Z")
it disappears? ---
**Author:** ![Hermitian](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/hermitian/32/470_2.png) [@Hermitian](https://boards.straightdope.com/u/Hermitian)\ **Post date:** [February 4, 2015, 3:30pm UTC](https://boards.straightdope.com/t/why-do-the-fees-in-my-401k-increase-my-balance/711807/3 "2015-02-04T15:30:43Z")
Oh just to add, I also periodically have a item that says “Dividends and Interest.” It is usually much larger than “fees” but it does NOT add to my balance. Also, my company uses Fidelity for its 401k, if that helps. ---
**Author:** ![Hermitian](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/hermitian/32/470_2.png) [@Hermitian](https://boards.straightdope.com/u/Hermitian)\ **Post date:** [February 4, 2015, 6:34pm UTC](https://boards.straightdope.com/t/why-do-the-fees-in-my-401k-increase-my-balance/711807/4 "2015-02-04T18:34:39Z")
> [@Si\_Amigo](#): > > it disappears? **Si Amigo** , I am not sure I understand your question. ---
**Author:** ![Si\_Amigo](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/si_amigo/32/2877_2.png) [@Si\_Amigo](https://boards.straightdope.com/u/Si_Amigo)\ **Post date:** [February 4, 2015, 6:39pm UTC](https://boards.straightdope.com/t/why-do-the-fees-in-my-401k-increase-my-balance/711807/5 "2015-02-04T18:39:19Z")
> [@Hermitian](#): > > **Si Amigo** , I am not sure I understand your question. When you first posted half of your post was missing. Then it appears you edited. ---
**Author:** ![Heracles](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/heracles/32/487_2.png) [@Heracles](https://boards.straightdope.com/u/Heracles)\ **Post date:** [February 4, 2015, 10:36pm UTC](https://boards.straightdope.com/t/why-do-the-fees-in-my-401k-increase-my-balance/711807/6 "2015-02-04T22:36:24Z")
Probably some administration fees (explicit or hidden) have been erroneously billed to your account in the past and are now being reimbursed to you. ---
**Author:** ![Alley\_Dweller](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/alley_dweller/32/430_2.png) [@Alley\_Dweller](https://boards.straightdope.com/u/Alley_Dweller)\ **Post date:** [February 4, 2015, 11:32pm UTC](https://boards.straightdope.com/t/why-do-the-fees-in-my-401k-increase-my-balance/711807/7 "2015-02-04T23:32:19Z")
Does your employer have a vesting schedule for the company matches? That is, you have to work there a certain number of years before you get to keep all of the company match? Typically forfeited matches are used to pay for administrative expenses and fees. They can be distributed to other participants. Maybe when your plan’s forfeitures exceed fees, they credit participants with a “negative” fee. ---
**Author:** ![wellanuff](https://avatars.discourse-cdn.com/v4/letter/w/57b2e6/32.png) [@wellanuff](https://boards.straightdope.com/u/wellanuff)\ **Post date:** [February 4, 2015, 11:46pm UTC](https://boards.straightdope.com/t/why-do-the-fees-in-my-401k-increase-my-balance/711807/8 "2015-02-04T23:46:47Z")
> [@Hermitian](#): > > Oh just to add, I also periodically have a item that says “Dividends and Interest.” It is usually much larger than “fees” but it does NOT add to my balance. > > Also, my company uses Fidelity for its 401k, if that helps. The dividends don’t add to your balance because the value of your mutual funds goes down by the same amount when they pay a dividend. If it sounds like a zero-sum exercise that doesn’t make a difference, the slight significance is that people who automatically re-invest their dividends end up owning more shares in that particular fund than people who take the dividends in cash. ---
**Author:** ![Alley\_Dweller](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/alley_dweller/32/430_2.png) [@Alley\_Dweller](https://boards.straightdope.com/u/Alley_Dweller)\ **Post date:** [February 5, 2015, 12:02am UTC](https://boards.straightdope.com/t/why-do-the-fees-in-my-401k-increase-my-balance/711807/9 "2015-02-05T00:02:30Z")
> [@wellanuff](#): > > The dividends don’t add to your balance because the value of your mutual funds goes down by the same amount when they pay a dividend. If it sounds like a zero-sum exercise that doesn’t make a difference, the slight significance is that people who automatically re-invest their dividends end up owning more shares in that particular fund than people who take the dividends in cash. It doesn’t matter in a tax-deferred account like a 401(k) or an IRA because dividends are not taxable until, possibly, they are distributed from the tax-deferred account, but if these same funds are available to investors in a non-retirement account, it is done for tax reasons. Normally, if you owned stocks or bonds (or other investments) directly as an individual or a corporation, you have to pay tax on any capital gains you earned as a result of trades or on any dividends or interest you received from your investments. But mutual funds are tax-exempt if they pass through at least 90% of their capital gains and dividends and interest to their shareholders. Then the share owners pay the tax instead, if applicable. ---
**Author:** ![Hermitian](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/hermitian/32/470_2.png) [@Hermitian](https://boards.straightdope.com/u/Hermitian)\ **Post date:** [February 5, 2015, 3:38am UTC](https://boards.straightdope.com/t/why-do-the-fees-in-my-401k-increase-my-balance/711807/10 "2015-02-05T03:38:39Z")
> [@Alley\_Dweller](#): > > Does your employer have a vesting schedule for the company matches? That is, you have to work there a certain number of years before you get to keep all of the company match? > > Typically forfeited matches are used to pay for administrative expenses and fees. They can be distributed to other participants. Maybe when your plan’s forfeitures exceed fees, they credit participants with a “negative” fee. Well, I don’t think it has anything to do with forfeited matches because my company does not match contributions. It just gives a straight percentage to everyone. It does use a vesting schedule. I have been vested for several years now. ---
**Author:** ![Alley\_Dweller](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/alley_dweller/32/430_2.png) [@Alley\_Dweller](https://boards.straightdope.com/u/Alley_Dweller)\ **Post date:** [February 5, 2015, 4:33am UTC](https://boards.straightdope.com/t/why-do-the-fees-in-my-401k-increase-my-balance/711807/11 "2015-02-05T04:33:08Z")
> [@Hermitian](#): > > Well, I don’t think it has anything to do with forfeited matches because my company does not match contributions. It just gives a straight percentage to everyone. > > It does use a vesting schedule. I have been vested for several years now. Same thing. When other employees quit before they are fully vested, the money they lose has to go somewhere. Some employers set up their plans so that the money goes to the remaining employees, vested or not. ---
**Author:** ![zombywoof](https://avatars.discourse-cdn.com/v4/letter/z/9e8a1a/32.png) [@zombywoof](https://boards.straightdope.com/u/zombywoof)\ **Post date:** [February 5, 2015, 5:44am UTC](https://boards.straightdope.com/t/why-do-the-fees-in-my-401k-increase-my-balance/711807/12 "2015-02-05T05:44:36Z")
Surely your 401k provider is in the best position to answer your question - why don’t you just call them and ask? ---
**Author:** ![robert\_columbia](https://avatars.discourse-cdn.com/v4/letter/r/e79b87/32.png) [@robert\_columbia](https://boards.straightdope.com/u/robert_columbia)\ **Post date:** [February 5, 2015, 3:19pm UTC](https://boards.straightdope.com/t/why-do-the-fees-in-my-401k-increase-my-balance/711807/13 "2015-02-05T15:19:54Z")
> [@Si\_Amigo](#): > > it disappears? [And it’s gone](https://www.youtube.com/watch?v=-DT7bX-B1Mg). ---
**Author:** ![Hermitian](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/hermitian/32/470_2.png) [@Hermitian](https://boards.straightdope.com/u/Hermitian)\ **Post date:** [February 5, 2015, 6:17pm UTC](https://boards.straightdope.com/t/why-do-the-fees-in-my-401k-increase-my-balance/711807/14 "2015-02-05T18:17:18Z")
> [@zombywoof](#): > > Surely your 401k provider is in the best position to answer your question - why don’t you just call them and ask? I will when I get some time. I just thought maybe it was some simple and useful explanation that everyone else (non-accountants) could be edified by.