Julia D'Souza
Cornell University
John Jacob
University of Colorado at Boulder
Barbara Lougee
University of California, Irvine
Abstract: We investigate reasons why firms with traditional defined benefit pension plans convert to cash balance pension plans. Using a sample of firms that made this conversion and a control sample of firms that retained their traditional defined balance plans, we document empirical regularities in these samples. We find that the decision to make the conversion is associated with overfunding of pension plans and firm profitability.
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