Pension Benefit Insurance and Pension Plan Portfolio Choice

Thomas Crossley () and Mario Jametti ()

The Review of Economics and Statistics, 2013, vol. 95, issue 1, 337-341

Abstract: Pension benefit guarantees have been introduced in several countries to protect private plan members from the loss of income associated with the termination of an underfunded plan. Most such schemes face financial difficulty. Consequently, policy reforms are being contemplated. Economic theory suggests that such schemes will suffer moral hazard problems. We test a specific theoretical prediction: insured plans will invest more heavily in risky assets. Our test exploits policy differences across Canadian jurisdictions. We find that insured plans invest about 5% more in equities than do similar plans without benefit guarantees. © 2013 The President and Fellows of Harvard College and the Massachusetts Institute of Technology.

Keywords: pensions; bene t guarantee; moral hazard (search for similar items in EconPapers)
JEL-codes: C21 G11 G23 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (7)

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Working Paper: Pension Benefit Insurance and Pension Plan Portfolio Choice (2008)
Working Paper: Pension Benefit Insurance and Pension Plan Portfolio Choice (2008)
Working Paper: Pension Benefit Insurance and Pension Plan Portfolio Choice (2008)
Working Paper: Pension Benefit Insurance and Pension Plan Portfolio Choice (2008)
Working Paper: Pension Benefit Insurance and Pension Plan Portfolio Choice (2008)
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