dividends received after participant is paid out

[k man]

is the plan legally required to post the dividend and then make a second distribution to the terminated and paid out participant or can they forfeit the dividends received after the participant is no longer part of the plan? i am not aware of any legal authority on the subject.

[BG5150]

If the person was an owner of a fund on the ex-date, what right does the plan have to take a dividend from him?

[k man]

If the person was an owner of a fund on the ex-date, what right does the plan have to take a dividend from him?

i could argue the plan is the legal owner of the fund shares but maybe that is semantics. i am not necessarily advocating a position. i was looking for guidance on the subject and their doesn't seem to be anything written.

[jpod]

I think you could write a plan document for even a self-directed plan to say that trailing dividends will be allocated to the remaining participants, as unfair as that might sound. However, I doubt that the plan you are working with says that, and without saying that I think the most reasonable interpretation/approach is that an ex-dividend trailing dividend belongs to the participant whose account earned it.

[My 2 cents]

1. If the value of the security fell (by roughly the amount of the dividend) once the ex-date had been passed (since sale of the security would not result in the buyer receiving the dividend), equity would seem to call for the participant to be paid the dividend since the sale price was predicated on the seller receiving the announced dividend.

2. Had such a thing ever happened before? If so, wouldn't consistency with past administrative practice be necessary?