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Managing corporate pension plans: the impacts of inflation /

By: Contributor(s): Material type: TextTextSeries: Studies in social security and retirement policy | AEI studiesPublication details: Washington : American Enterprise Institute for Public Policy Research, c1984.Description: 68 pISBN:
  • 0844734861 (pbk.)
Subject(s): DDC classification:
  • 332.6'7254 LOG
LOC classification:
  • HD7105.45.U6 L63 1984
Online resources: Summary: The asset allocation of defined benefit pension plans is a setting where both risk shifting and risk management incentives are likely be present. Empirically, firms with poorly funded pension plans and weak credit ratings allocate a greater share of pension fund assets to safer securities such as government debt and cash, whereas firms with well-funded pension plans and strong credit ratings invest more heavily in equity. These relations hold both in the cross-section and within firms and plans over time. The incentive to limit costly financial distress plays a considerably larger role than risk shifting in explaining variation in pension fund investment policy among U.S. firms.
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Includes bibliographical references.

The asset allocation of defined benefit pension plans is a setting where both risk shifting and risk management incentives are likely be present. Empirically, firms with poorly funded pension plans and weak credit ratings allocate a greater share of pension fund assets to safer securities such as government debt and cash, whereas firms with well-funded pension plans and strong credit ratings invest more heavily in equity. These relations hold both in the cross-section and within firms and plans over time. The incentive to limit costly financial distress plays a considerably larger role than risk shifting in explaining variation in pension fund investment policy among U.S. firms.

aia 22/03/2019

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