Dividend on equity pension

pillphil

Does a pension invested in equities receive a dividend?

banie01

pillphil wrote: »

Does a pension invested in equities receive a dividend?

You need to clarify the nature of the investment?
Is it a managed pension fund invested into equities?

If so, then yes the fund would receive dividends accrued on any shares that pay them but those dividends would usually be scrip and paid in additional shares or as cash and then reinvested as per the fund rules.

If it is via PRSA, I honestly don't know as I have know direct knowledge of those products.

pillphil

banie01 wrote: »

You need to clarify the nature of the investment?
Is it a managed pension fund invested into equities?

If so, then yes the fund would receive dividends accrued on any shares that pay them but those dividends would usually be scrip and paid in additional shares or as cash and then reinvested as per the fund rules.

If it is via PRSA, I honestly don't know as I have know direct knowledge of those products.

It's the pension fund provided by the company I work for. I can't find anything in the pension docs about dividends.

It's a global equity passive fund, if that helps.

Would these typically be listed as separate transactions? I can see my monthly transactions, the total of what I've paid in, and it's current worth, but I'd assumed the total worth was based on the underlying share prices.

banie01

pillphil wrote: »

It's the pension fund provided by the company I work for. I can't find anything in the pension docs about dividends.

It's a global equity passive fund, if that helps.

Would these typically be listed as separate transactions? I can see my monthly transactions, the total of what I've paid in, and it's current worth, but I'd assumed the total worth was based on the underlying share prices.

Ok it's a normal pension equities fund then.

Think of it as a giant pot of money that the fund managers move in and out of positions on an ongoing basis.
Money that accrues to the fund from share value, dividends and interest will be calculated on a daily basis and a unit price for that fund will be generated on a daily basis.
It's the unit price that is the indicator of fund performance day to day.
So when you bought into the fund, unit price was e.g €10, that unit price is based on the basket of all assets held. Adding money to your fund buys additional units and the hope for pensions investment is that growth in your overall fund is made up of growth in your unit price, compounding and the effect of DCA in allowing additional fund buys to gain the benefit of inflationary growth.

Your fund sounds like one of the Irish life investment platforms and the information usually included in the report to fund members is basically a P+L sheet.
You will get a list of market exposure, transaction costs, growth, and a statement of your contributions for the year.
You will not get a breakdown of individual stock transactions, accruals or disposals for the assets traded as a large fund could quite easily have 10s of thousands of transactions on an annual basis.

You could likely Google the fund provider and get a full list of the holdings, but individualized transactions are very unlikely.

pillphil

Ah, ok, does that mean that dividends don't increase the number of units I have, they increase the value of the units instead?

You will not get a breakdown of individual stock transactions, accruals or disposals for the assets traded as a large fund could quite easily have 10s of thousands of transactions on an annual basis.

Sorry, what I mean by transactions was for example I can see how many units were bought each month and at what price. I think i've found the underlying fund, and they pay dividends twice yearly, so I thought they might appear in the same fashion. But if the above is correct, it would make sense why they don't appear like that.

banie01

pillphil wrote: »

Ah, ok, does that mean that dividends don't increase the number of units I have, they increase the value of the units instead?

Exactly.
Dividends will increase the cash pot and the overall unit price.
The fund will likely declare a daily NAV/ unit price and that's where you will see any underlying gain.

Your direct money into the fund from your contributions buys you additional Units.
Profit(and Losses) accrued on the fund are reflected in the Unit Price, rather than buying you additional units.

pillphil

Thanks for the explanation