The Impact of Corporate Pension Plan Reversions on Retirement Benefits

Fred W. McKenna, A. Frank Thompson, Yong H. Kim and Philip W. Glasgo

Journal of Insurance Issues, 1986, vol. 9, issue 2, 44-56

Abstract: Recently, corporations in increasing numbers are terminating their defined benefit pensions, paying off associated pension liabilities and recovering the remaining assets from their plans. Corporate raiding of pension fun assets has evoked public and Congressional scrutiny. This paper examines (1) the legal and regulatory framework for pension plan reversions, (2) the impact corporate reversions may have on retirement benefits to workers, and (3) the consequences of reversions on PBGC. Results indicate that plan reversions may reduce future retirement benefits for workers. Since pension funding represents a form of deferred compensation to employees, corporate capture of pension assets through reversion may be viewed as reducing worker benefits.

Date: 1986
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Persistent link: https://EconPapers.repec.org/RePEc:wri:journl:v:9:y:1986:i:2:p:44-56

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