This dissertation examines the relationships existing between uninsured private defined-benefit pension plans and their sponsoring firms. The study is partitioned into two segments each designed to examine a different type of corporate/pension plan relationship. The first segment examines the impact of terminating overfunded pension plans on equity securities. The existence of a wealth effect is measured using standard event study methodology and a sample of firms terminating overfunded plans during the period 1980 through 1984. The residual or excess equity returns are then analyzed by applying regression analysis to a series of testable hypotheses developed to identify the economic events generating the excess returns. The results of the study suggest that the amount of excess equity returns present around the termination of overfunded plans varies depending on whether the firm is terminating the plan pursuant to a divestiture and whether the termination occurred after the new termination guidelines went into effect in 1984. / The second segment examines whether the sponsoring firm's financial managers consider the pension balance sheet to be part of the firm's "augmented" balance sheet when making capital structure decisions. The study uses a sample of firms having defined-benefit plans during the period 1980 through 1984. A series of testable hypotheses are developed to allow a variety of alternative relationships to be examined using regression analysis. In addition to OLS regression a Tobit analysis is also performed to adjust for the fact that the unfunded pension liabilities reported in the firm's annual report are truncated at zero. The results of the study suggest that the firm's financial managers make capital structure decisions based on a combined or "augmented" balance sheet rather than on the firm's balance sheet alone. The relationship, however, does not appear to be constant across all levels of pension assets, liabilities and funding or across years. In addition, the relationship does not appear to be linear and changes from a complementary to a substitution relationship depending on the pension variable being examined. / Source: Dissertation Abstracts International, Volume: 48-03, Section: A, page: 0713. / Thesis (Ph.D.)--The Florida State University, 1987.
| Identifer | oai:union.ndltd.org:fsu.edu/oai:fsu.digital.flvc.org:fsu_76070 |
| Contributors | MOORE, NORMAN H., Florida State University |
| Source Sets | Florida State University |
| Detected Language | English |
| Type | Text |
| Format | 176 p. |
| Rights | On campus use only. |
| Relation | Dissertation Abstracts International |
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