IK retargeter - Target character offset on Z axis?

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I have a character that is retargeted to the UE5 mannequin with identical IK rig asset, but for some reason the characters Armature(root) bone is offset on z axis and the character is floating above. In game it is the same way. To fix this I had to disable IK, and set blend to source on 1 in root settings in IK retargeter. Without IK I get some bone offsets, so is there a way to fix this issue?

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