Sponsoring company finance, investment and pension plan funding

• 成果类型: Article
• 署名作者: Webb, David C.
• 署名单位: University of London; London School Economics & Political Science
• 刊物名称: ECONOMIC JOURNAL
• ISSN/ISSBN: 0013-0133
• DOI: 10.1111/j.1468-0297.2007.02048.x
• 发表日期: 2007
• 页码: 738-760
• 关键词: benefit guaranty corporation; obligations; debt

摘要

This article presents a model of the interaction of a company's financial and real investment decisions with the financing of its defined benefit pension plan. The pension plan deficit is a debt of the company, with explicit funding requirements and priority in the event of company insolvency. Pension plan deficits and options on future deficits and surpluses affect investment incentives as does the size and composition of company debt. We examine incentives for the firm to pay dividends rather than fund the pension plan and incentives to overfund the pension plan. The effects of pension benefit insurance and minimum funding requirements are shown.