Document Type
Article
Publication Date
12-16-2024
Abstract
We examine the impact of managerial ability on defined-benefit pension plans in US firms and find that plan funding levels increase with their sponsors' managerial ability. The finding is robust to various model specifications and control for endogeneity. Further analyses show that high-ability managers make higher employer contributions and adopt more conservative and prudent plan assumptions and investment strategies, and that their pension management is value-enhancing. We conclude that more able managers are cognisant of obligations toward pension beneficiaries and fulfil such obligations with better-funded plans, which ultimately benefits shareholders.
This article was published Open Access through the CCU Libraries Transformative Agreement Program. The article was first published in the journal Accounting & Finance: https://doi.org/10.1111/acfi.13375
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Recommended Citation
Jory, S.R., Ngo, T. & Wang, H. (2024). Defined-benefit pension plan funding: Does managerial ability matter? Accounting & Finance, 00, 1–35. https://doi.org/10.1111/acfi.13375. Available at https://digitalcommons.coastal.edu/finance-economics/6/