publication . Article . Research . Preprint . 2008

Pension benefit insurance and pension plan portfolio choice

Thomas Crossley; Mario Jametti;
Open Access English
  • Published: 01 Dec 2008 Journal: volume 95, issue 1 March, pages 337-341
  • Publisher: Munich: Center for Economic Studies and Ifo Institute (CESifo)
Abstract
Pension benefit guarantee policies have been introduced in several countries to pro- tect private pension plan members from the loss of income that would occur if a plan was underfunded when the sponsoring firm terminates a plan. Most of these public insurance schemes face financial dificulty and consequently policy reforms are being discussed or implemented. Economic theory suggests that such schemes will face moral hazard and adverse selection problems. In this note we test a specific theoretical prediction -- insured plans will invest more heavily in risky assets. Our test exploits differences in insurance arrangements across Canadian jurisdictions. We find t...
Subjects
free text keywords: benefit guarantee, C21, Garantie, G11, Kanada, G23, Moral Hazard, pensions, bene t guarantee, moral hazard, Private Rentenversicherung, Pensions, Pensionsfonds, Pensions, benefit guarantee, moral hazard, Pensionskasse, Portfolio-Management, Funds, Economics; Social sciences, Mathematical methods, jel:C21, jel:G23, jel:G11, ddc:330
74 references, page 1 of 5

[1] Baker, M. and K. Milligan, 2008, Evidence from maternity leave expansions of the impact of maternal care on early child development, NBER Working Paper 13826.

[4] Cooper, R.W. and T.W. Ross, 2003, Protecting underfunded pensions: the role of guarantee funds, Journal of Pension Economics and Finance 2(3), 247-272.

[5] Cummins, J.D. and J.F. Outreville, 1984, The portfolio behaviour of pension funds in the US: an econometric analysis of changes since the new regulation of 1974, Applied Economics 16, 687-701.

[7] Donald, F.G. and K. Lang, 2007, Inference with di¤erence-in-di¤erences and other panel data, Review of Economics and Statistics 89(2), 221-233.

[9] Moulton, B.R., 1990, An illustration of a pitfall in estimating the e¤ects of aggregate variables in micro units, Review of Economics and Statistics 72(2), 334-338. [OpenAIRE]

[10] Nielson, N.L. and D.K.W. Chan, 2007, Private pensions and government guarantees: clues from Canada, Journal of Pension Economics and Finance 6(1), 45-66.

[11] Palardy, M. and C. Van Rompaey, 2008, A micro-based measurement framework for Canadian pensions, Paper prepared for the 30th General Conference of the International Association for Research in Income and Wealth.

[12] Sharpe, W. F., 1976, Corporate pension funding policy, Journal of Financial Economics 3, 183-193.

2433 Kurt R. Brekke and Odd Rune Straume, Pharmaceutical Patents: Incentives for R&D or Marketing?, October 2008

2434 Scott Alan Carson, Geography, Insolation, and Institutional Change in 19th Century African-American and White Stature in Southern States, October 2008

2435 Emilia Del Bono and Daniela Vuri, Job Mobility and the Gender Wage Gap in Italy, October 2008

2436 Marco Angrisani, Antonio Guarino, Steffen Huck and Nathan Larson, No-Trade in the Laboratory, October 2008

2437 Josse Delfgaauw and Robert Dur, Managerial Talent, Motivation, and Self-Selection into Public Management, October 2008 [OpenAIRE]

2438 Christian Bauer and Wolfgang Buchholz, How Changing Prudence and Risk Aversion Affect Optimal Saving, October 2008

2439 Erich Battistin, Clara Graziano and Bruno Parigi, Connections and Performance in Bankers' Turnover: Better Wed over the Mixen than over the Moor, October 2008

74 references, page 1 of 5
Abstract
Pension benefit guarantee policies have been introduced in several countries to pro- tect private pension plan members from the loss of income that would occur if a plan was underfunded when the sponsoring firm terminates a plan. Most of these public insurance schemes face financial dificulty and consequently policy reforms are being discussed or implemented. Economic theory suggests that such schemes will face moral hazard and adverse selection problems. In this note we test a specific theoretical prediction -- insured plans will invest more heavily in risky assets. Our test exploits differences in insurance arrangements across Canadian jurisdictions. We find t...
Subjects
free text keywords: benefit guarantee, C21, Garantie, G11, Kanada, G23, Moral Hazard, pensions, bene t guarantee, moral hazard, Private Rentenversicherung, Pensions, Pensionsfonds, Pensions, benefit guarantee, moral hazard, Pensionskasse, Portfolio-Management, Funds, Economics; Social sciences, Mathematical methods, jel:C21, jel:G23, jel:G11, ddc:330
74 references, page 1 of 5

[1] Baker, M. and K. Milligan, 2008, Evidence from maternity leave expansions of the impact of maternal care on early child development, NBER Working Paper 13826.

[4] Cooper, R.W. and T.W. Ross, 2003, Protecting underfunded pensions: the role of guarantee funds, Journal of Pension Economics and Finance 2(3), 247-272.

[5] Cummins, J.D. and J.F. Outreville, 1984, The portfolio behaviour of pension funds in the US: an econometric analysis of changes since the new regulation of 1974, Applied Economics 16, 687-701.

[7] Donald, F.G. and K. Lang, 2007, Inference with di¤erence-in-di¤erences and other panel data, Review of Economics and Statistics 89(2), 221-233.

[9] Moulton, B.R., 1990, An illustration of a pitfall in estimating the e¤ects of aggregate variables in micro units, Review of Economics and Statistics 72(2), 334-338. [OpenAIRE]

[10] Nielson, N.L. and D.K.W. Chan, 2007, Private pensions and government guarantees: clues from Canada, Journal of Pension Economics and Finance 6(1), 45-66.

[11] Palardy, M. and C. Van Rompaey, 2008, A micro-based measurement framework for Canadian pensions, Paper prepared for the 30th General Conference of the International Association for Research in Income and Wealth.

[12] Sharpe, W. F., 1976, Corporate pension funding policy, Journal of Financial Economics 3, 183-193.

2433 Kurt R. Brekke and Odd Rune Straume, Pharmaceutical Patents: Incentives for R&D or Marketing?, October 2008

2434 Scott Alan Carson, Geography, Insolation, and Institutional Change in 19th Century African-American and White Stature in Southern States, October 2008

2435 Emilia Del Bono and Daniela Vuri, Job Mobility and the Gender Wage Gap in Italy, October 2008

2436 Marco Angrisani, Antonio Guarino, Steffen Huck and Nathan Larson, No-Trade in the Laboratory, October 2008

2437 Josse Delfgaauw and Robert Dur, Managerial Talent, Motivation, and Self-Selection into Public Management, October 2008 [OpenAIRE]

2438 Christian Bauer and Wolfgang Buchholz, How Changing Prudence and Risk Aversion Affect Optimal Saving, October 2008

2439 Erich Battistin, Clara Graziano and Bruno Parigi, Connections and Performance in Bankers' Turnover: Better Wed over the Mixen than over the Moor, October 2008

74 references, page 1 of 5
Powered by OpenAIRE Open Research Graph
Any information missing or wrong?Report an Issue
publication . Article . Research . Preprint . 2008

Pension benefit insurance and pension plan portfolio choice

Thomas Crossley; Mario Jametti;