Download This PaperThe Signals of Pension Freezes
26 Pages Posted: 20 May 2020
Date Written: April 23, 2020
Abstract
Pension freezes have become a trend in recent years. Both the underlying firms' employees and equity shareholders need to be aware of these pension modifications, this research aims at discovering the signals of pension freezes. This paper researches on hand-collected data of three kinds of pension freezes during 2013 – 2019 and run logistic regressions of whether to freeze the pension plan or not on the firm characteristics and executive features. The research finds out the lack of operating cash flow, low book leverage, high retained earnings and less frequent CEO change could be the signal before the pension freezes. The executive features are not enough to induce the pension plan freezes in the sample data.
Keywords: Corporate governance, Pension plan freezes, Defined benefit pensions
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