Do Highly Compensated Participants Influence The Management Of Qualified Pension Plans?
AbstractThis paper presents evidence of favorable management of qualified pension plans with large proportion of highly compensated employees. Defined-benefit pension plans that are dominated by highly compensated employees tend to contribute beyond the minimum amount required under Internal Revenue Code (flow effect) resulting in overfunded plans (stock effect) and then use aggressive actuarial assumptions to disguise the overfunding to avoid visibility costs (reporting effect). This favored treatment is less likely when the sponsoring firm has an active labor union (monitoring effect). These actions contradict the provisions under the Employee Retirement Income Security Act and the Internal Revenue Code, which prohibit favorable treatment for highly compensated employees.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by College of Business, University of Texas at San Antonio in its series Working Papers with number 0025.
Length: 38 pages
Date of creation:
Date of revision:
Defined-Benefit Pension plans; highly compensated employees; funding; actuarial assumptions;
Find related papers by JEL classification:
- C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
- G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
- J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
- J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects
- M41 - Business Administration and Business Economics; Marketing; Accounting - - Accounting - - - Accounting
You can help add them by filling out this form.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Eddie Salinas).
If references are entirely missing, you can add them using this form.