Hello all,
I am new to this forum but hopefully some of the members will be able to help with my questions below regarding my 401K plan.
What am I missing here or don't understand?
I have a 401K plan that has a S & P 500 fund in it. Over a one and a half year period, I did not make any contributions to the fund. While the NAV (Net Asset Value) of the account increased, the number of shares stayed exactly the same. The period of time that the NAV increased was a recently good period for the stock market (2004 to 2006) so I am not surprised that the per share value went up.
But what I cannot understand and determine is what the dividends/capital gains were in my account and why, based on the principal of compounding by reinvesting income and capital gains to purchase additional shares, I did not receive even one additional share. This is a $100,000 account by the way. All of my IRA's with different mutual fund companies show income (dividends & capital gains) which are reinvested each year to purchase additional shares so that every year I have more shares working for me.
Also, I have another highly rated value stock fund (Dodge & Cox Stock Fund - DODGX) in the same 401K plan with $151,766 in it. Again, I did not make any contributions to this fund for the entire year (2007) and ended 2007 with same number of shares that I started out with at the beginning of 2007. The 401K plans website stated my total 2007 cash earnings were $4.49. Yes,that's right,$4.49. My Dodge & Cox Stock Fund (DODGX) IRA paid 4th quarter distributions (dividends & capital gains) of $4,552 on a balance of $54,116 which was all reinvested to purchase additional shares. Simple. My 401K Dodge & Cox 4th qtr cash earnings were $3.33. Of that amount, $.13 in cash earnings were credited to my D & G account on 12/17/07. Again, you're reading it right. $.13 cents!
Is this something I should be concerned about? If so, what steps should I take? My company plan administrator and the bank 401K trustee say everything is fine, They say I just don't understand how the plan works. No, I certainly do not understand how the plan works, that is for sure.
Don't all 401K stock plans work the same by reinvesting income (dividends & capital gains) to purchase additional shares that then earn more dividends/capital gains or is there some other way that dividends and capital gains are managed in 401K plans that I don't understand.
Confused and concerned. Any help or clarification on this matter will be very greatly appreciated.
Retire63
I am new to this forum but hopefully some of the members will be able to help with my questions below regarding my 401K plan.
What am I missing here or don't understand?
I have a 401K plan that has a S & P 500 fund in it. Over a one and a half year period, I did not make any contributions to the fund. While the NAV (Net Asset Value) of the account increased, the number of shares stayed exactly the same. The period of time that the NAV increased was a recently good period for the stock market (2004 to 2006) so I am not surprised that the per share value went up.
But what I cannot understand and determine is what the dividends/capital gains were in my account and why, based on the principal of compounding by reinvesting income and capital gains to purchase additional shares, I did not receive even one additional share. This is a $100,000 account by the way. All of my IRA's with different mutual fund companies show income (dividends & capital gains) which are reinvested each year to purchase additional shares so that every year I have more shares working for me.
Also, I have another highly rated value stock fund (Dodge & Cox Stock Fund - DODGX) in the same 401K plan with $151,766 in it. Again, I did not make any contributions to this fund for the entire year (2007) and ended 2007 with same number of shares that I started out with at the beginning of 2007. The 401K plans website stated my total 2007 cash earnings were $4.49. Yes,that's right,$4.49. My Dodge & Cox Stock Fund (DODGX) IRA paid 4th quarter distributions (dividends & capital gains) of $4,552 on a balance of $54,116 which was all reinvested to purchase additional shares. Simple. My 401K Dodge & Cox 4th qtr cash earnings were $3.33. Of that amount, $.13 in cash earnings were credited to my D & G account on 12/17/07. Again, you're reading it right. $.13 cents!
Is this something I should be concerned about? If so, what steps should I take? My company plan administrator and the bank 401K trustee say everything is fine, They say I just don't understand how the plan works. No, I certainly do not understand how the plan works, that is for sure.
Don't all 401K stock plans work the same by reinvesting income (dividends & capital gains) to purchase additional shares that then earn more dividends/capital gains or is there some other way that dividends and capital gains are managed in 401K plans that I don't understand.
Confused and concerned. Any help or clarification on this matter will be very greatly appreciated.
Retire63