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No. of Recommendations: 2
I'll take a shot at these.

1) My assumption is that the "cash" dividend is still held in the 401k account. Otherwise, you will have to pay tax (and perhaps penalties) on it. I would also assume that you would then be able to invest the "cash" in any of the options currently available in the 401k plan. I assume that Fidelity is running the plan? You might try asking them again (different person on the phone sometimes does the trick). Also, you might try asking at your company (HR).

2) Myself, I would avoid such a proposition. The risk of such a fund isn't worth it to me. However, you have to make that decision. I would suspect that the reason you are offered this is that someone who runs the fund has a friend at your company...just a guess though. Never assume that your company has your best interest at heart. :)

Oh, and you mention that you have a large portion of your 401k in company stock. If you aren't able to sell the company match part (exchange it for other funds), you can always hedge this risk in a regular brokerage account. This requires money outside of the 401k and I would suggest talking to someone with experience in options (shorting a stock) if this is of interest to you.

Hope that helps.

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