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How residual dividends are handled post asset-transfer
How residual dividends are handled post asset-transfer
Updated over 9 months ago

A residual dividend is a payment made by a company to its shareholders after it has paid for its capital expenditures and working capital costs. Because 401(k) assets held by Guideline are invested in mutual funds, they may receive residual dividends on a quarterly, semi-annual, or even annual basis.
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When a 401(k) plan is being transferred from one 401(k) provider to another, all of the plan assets must be liquidated during the week of the transfer. Once liquidated, these assets are no longer invested on the market. However, they can still earn residual dividends from the time the 401(k) plan assets at Guideline were invested in the mutual fund that earned such residual dividends. These residual dividends may be paid after your 401(k) plan transferred to another provider.
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In order to get these additional earnings over to your new 401(k) service provider, Guideline will send a second wire to your new 401(k) provider consisting of the residual dividends. Guideline will also provide reporting to assist the new 401(k) service provider with allocating the dividends to the correct participant accounts. Once generated, this reporting is posted for plan administrators in the Resource Library section of their administrator dashboard.


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