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An Empirical Analysis of the Motives for Fully Funded Defined Benefit Plan Terminations

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  • Cassandra R. Cole
  • David W. Sommer

Abstract

Statistics gathered by the Pension Benefit Guaranty Corporation indicate that an average of 7,000 defined benefit plans were terminated per year between 1988 and 1997. Prior studies exploring motives for defined benefit pension plan terminations have focused exclusively on overfunded plans. This article expands upon the previous termination literature by examining motives for termination of fully funded defined benefit plans. The results indicate that fully funded terminations are partially driven by the firm’s ability to access capital. The results also suggest that motives for termination vary depending on the size of the firm.

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  • Cassandra R. Cole & David W. Sommer, 2005. "An Empirical Analysis of the Motives for Fully Funded Defined Benefit Plan Terminations," Journal of Insurance Issues, Western Risk and Insurance Association, vol. 28(1), pages 33-60.
    • Handle: RePEc:wri:journl:v:28:y:2005:i:1:p:33-60
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    Cited by:

    1. Laswad, Fawzi & Baskerville, Rachel F., 2007. "An analysis of the value of cash flow statements of New Zealand pension schemes," The British Accounting Review, Elsevier, vol. 39(4), pages 347-355.

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