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In good times and in bad : defined-benefit pensions and corporate financial policy
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Bartram, Söhnke M. (2018) In good times and in bad : defined-benefit pensions and corporate financial policy. Journal of Corporate Finance, 48 . pp. 331-351. doi:10.1016/j.jcorpfin.2017.10.015 ISSN 0929-1199.
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Official URL: https://doi.org/10.1016/j.jcorpfin.2017.10.015
Abstract
U.S. sponsors of defined-benefit pension plans integrate their pension plans into their overall financial management. Plan contributions are smaller and funding levels lower for plan sponsors that have less cash, are less profitable and are financially distressed. Moreover, plan sponsors make more aggressive pension plan assumptions if they have lower cash holdings and profit margins. While there is no evidence that plan sponsors generally take more risk with their pension plan as-sets if they have high business or financial risk, there is some evidence of risk shifting during major economic downturns such as the global financial crisis. As a result, funding rules, pension plan assumptions and investment policies are areas to consider for pension policy to protect plan beneficiaries.
| Item Type: | Journal Article | ||||||||
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| Subjects: | H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management | ||||||||
| Divisions: | Faculty of Social Sciences > Warwick Business School > Finance Group Faculty of Social Sciences > Warwick Business School |
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| Library of Congress Subject Headings (LCSH): | Pension trusts -- Investments., Pension trusts -- Law and legislation., Defined benefit pension plans., Corporations -- Finance, International finance., Pensions -- Management., Employee fringe benefits -- Law and legislation. | ||||||||
| Journal or Publication Title: | Journal of Corporate Finance | ||||||||
| Publisher: | Elsevier Science BV | ||||||||
| ISSN: | 0929-1199 | ||||||||
| Official Date: | February 2018 | ||||||||
| Dates: |
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| Volume: | 48 | ||||||||
| Page Range: | pp. 331-351 | ||||||||
| DOI: | 10.1016/j.jcorpfin.2017.10.015 | ||||||||
| Status: | Peer Reviewed | ||||||||
| Publication Status: | Published | ||||||||
| Access rights to Published version: | Restricted or Subscription Access | ||||||||
| Date of first compliant deposit: | 30 October 2017 | ||||||||
| Date of first compliant Open Access: | 28 November 2017 | ||||||||
| Open Access Version: |
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