NYBoglehead wrote:My wife and I keep our IRAs at Vanguard, and one day that I always enjoy is watching the quarterly dividends re-invested.
My wife's 401k provider is Prudential, and she contributes to the Dryden S&P 500 Index Fund and the Core Plus Bond / PIMCO Fund. No ticker symbols for either fund. Neither fund paid any sort of interest or dividend throughout the year and I figured that perhaps they just paid at the end of the calendar year. That came and passed and today I called Prudential to inquire about the lack of dividends and interest.
The completely unhelpful person informed me that dividends are the discretion of the fund manager. I politely replied that I had never heard of a 500 Index fund that did not pay dividends. Similarly, I inquired as to what the point of contributing to a Bond fund would be if we didn't receive interest. She replied that while dividends may not show up in the transaction history, perhaps dividends were still distributed and that is why the NAV was higher. I couldn't believe my ears. After speaking in circles I ended the conversation and informed my wife that she should contact her HR office to see what the heck is going on.
Any other Bogleheads out there that have had this happen to them? Am I off base in being outraged that no dividends or interest were paid from these funds?
If the plan is an annuity, the annuity subaccounts accumulate dividends and capital gains in the subaccount accumulation value. There are no distributions. See Variable Annuity - Bogleheads
for the terminology used by variable annuities.
Many employer provided plans use Collective Investment Trusts (CITs) as investment mediums as opposed to using mutual funds or exchange traded funds. With CITs there are no dividend or capital gains distributions; these are retained and are accumulated in the net asset value. Check and see if your plan is using CITs. See Collective Investment Trusts - Bogleheads
for further information (the external links will take you to Vanguard's Collective Trusts if you wish to examine this medium from a familiar investment management company.)