However....my quarterly statements never seem to reflect income from dividends, even though these funds have a yield and supposedly distribute dividends.
The 457(b) is managed by ING, so I called customer service and was told that the dividends are indeed distributed, but...through some magical accounting wizardry that I don't understand, the dividends are reflected somehow in the share price of the index fund and not as actual dividend distributions.
Does anyone else have a retirement vehicle like this where your dividends are reflected in the share price of the fund? And doesn't this make it hard to reinvest the dividends in the fund?
Be curious if anyone know how this works....seems fishy to me.
Thanks for any insights!
There was a thread a few weeks ago discussing this situation in a 401k plan with CITs:
Frank2012 wrote:Thank you for the info, Skylar. Much appreciated. I had not heard about a "Collective Investment Trust" before. Many thanks!
You're very welcome. If it makes you feel better, I hadn't heard of CITs before I started using this 457b either. Since they're not regulated like mutual funds and don't have a ticker symbol, I would be very leery about investing in any CIT that's not an index fund. At least with index funds you can go to Morningstar and compare performance easily.
our expense ratio is .03%. I still dont really understand the investment trust thing.
Frank2012 wrote:Does anyone else have a retirement vehicle like this where your dividends are reflected in the share price of the fund? And doesn't this make it hard to reinvest the dividends in the fund?
As noted, those will be collective investment trusts, and not having specific dividends is pretty typical. It's the same for all funds at MyMegaCorp, except the company stock fund. That pays dividends, which can be distributed in-service for some reason or the other.
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