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On the Determinants of Defined Benefit Pension Plan Conversions

On the Determinants of Defined Benefit Pension Plan Conversions This study utilizes pension plan level 5500 data from the Department of Labor and Internal Revenue Service to investigate the determinants of traditional defined benefit plan conversion to hybrid cash balance plans during the 1990s. Incorporating the possibility of plan termination instead of plan conversion, the author finds a negative effect of plan funding status, union status, the number of total defined benefit plans at the firm, and plan contributions on the likelihood of plan conversion. The number of active participants and total defined contribution plans at the firm positively affect the probability of conversion. Plans at firms with at least one union plan were less likely to terminate. Additionally, the number of defined benefit plans at the firm and plan contributions had a negative effect on the likelihood of plan termination. Industry fixed effects were significant in all specifications. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Labor Research Springer Journals

On the Determinants of Defined Benefit Pension Plan Conversions

Journal of Labor Research , Volume 30 (2) – Dec 16, 2008

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References (36)

Publisher
Springer Journals
Copyright
Copyright © 2008 by Springer Science+Business Media, LLC
Subject
Social Sciences; Social Sciences, general
ISSN
0195-3613
eISSN
1936-4768
DOI
10.1007/s12122-008-9059-9
Publisher site
See Article on Publisher Site

Abstract

This study utilizes pension plan level 5500 data from the Department of Labor and Internal Revenue Service to investigate the determinants of traditional defined benefit plan conversion to hybrid cash balance plans during the 1990s. Incorporating the possibility of plan termination instead of plan conversion, the author finds a negative effect of plan funding status, union status, the number of total defined benefit plans at the firm, and plan contributions on the likelihood of plan conversion. The number of active participants and total defined contribution plans at the firm positively affect the probability of conversion. Plans at firms with at least one union plan were less likely to terminate. Additionally, the number of defined benefit plans at the firm and plan contributions had a negative effect on the likelihood of plan termination. Industry fixed effects were significant in all specifications.

Journal

Journal of Labor ResearchSpringer Journals

Published: Dec 16, 2008

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