Does the Financial Market Fully Price Unfunded Pension Liabilities in Australia: Evidence from Corporate Defined-Benefit Superannuatio

Posted: 30 Nov 2012

See all articles by Adam Butt

Adam Butt

Australian National University - Research School of Finance, Actuarial Studies & Statistics

Yin Liao

Australian National University - The Centre for Applied Macroeconomic Analysis (CAMA); Macquarie University - Department of Applied Finance and Actuarial Studies

Di Bu

University of Queensland

Date Written: November 29, 2012

Abstract

As one of the older but still widespread forms of superannuation in Australia, the majority of defined benefit funds in Australia have experienced significant deficits since the beginning of the global financial crisis. Due to the presence of complex actuarial assumptions and far-from-transparent accounting disclosure, these deficits may not yet be fully manifested in financial markets. In this paper, a unique dataset comprising the defined benefit obligations of Australian listed firms over 2005-2010 is investigated to empirically test whether these unfunded pension liabilities are completely priced in Australian financial markets. Our study has important implications for corporate finance and accounting policy.

Suggested Citation

Butt, Adam and Liao, Yin and Liao, Yin and Bu, Di, Does the Financial Market Fully Price Unfunded Pension Liabilities in Australia: Evidence from Corporate Defined-Benefit Superannuatio (November 29, 2012). Available at SSRN: https://ssrn.com/abstract=2182817

Adam Butt

Australian National University - Research School of Finance, Actuarial Studies & Statistics ( email )

Canberra, Australian Capital Territory 2601
Australia

Yin Liao (Contact Author)

Australian National University - The Centre for Applied Macroeconomic Analysis (CAMA) ( email )

Canberra, Australian Capital Territory 2601
Australia

Macquarie University - Department of Applied Finance and Actuarial Studies ( email )

Eastern Rd.
North Ryde
Sydney, NSW 2109
United States

Di Bu

University of Queensland ( email )

Australia

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