Well there no real good way of doing the fade without compositing, custom raytrace shaders or using duplicate geometry.
So yoru looking to push the reflection with a standard alpha over. no prob.
there are severa ways to approach this. the fact that you use a colord background plate make sit a bit harder to workout with the easiest approach but ist doable:
this si what id do is you take the outcolor usebg shadhader connect it to a +-avarage athen connect the matte opacity to the next slot of +-avg and set mdoe to subtract (now this is a trick that spcificaly works for white color ifd the color is NOT white you need to work on the matte opacity color a abit and tint it to the bg color)
Now for the faded reflect that needs a duplicate object and a duplicate material that fades into the sky
That said theres many wqys to filet this fish. And in general if i wat easily doable in comp THEN DO IT IN COMP because this has a added benefit for you. Theres no idea in ofrcing a singlepass render fi you can do is painelssy in comp. Hell most of us ework much to SPLIT things into comps just because of teh added flexcibility at cruch time you should to.