NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Analysis of Pension Funding Under Erisa

Jeremy I. Bulow

NBER Working Paper No. 402
Issued in November 1979
NBER Program(s):   PE

This paper begins by describing the tax, funding, and insurance aspects of the Pension Reform Act of 1974. Next, the implications of those laws are analyzed from the standpoint of the funding decision of the firm. The tax advantage of early funding appears to be quite small. Because there are insurance and other reasons (related to asymmetries in the pension law) why firms might wish to underfund their plans, there is no good reason to expect all firms to fund to the limit. The final section discusses the magnitude of the firms' unfunded pension liability, properly defined. This debt is shown to be quite small. A major reason for this is the substantial increase in long- term nominal interest rates, which have decreased the present value of accrued benefits and, equally, unfunded pension obligations.

download in pdf format
   (1947 K)

email paper

This paper is available as PDF (1947 K) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Published: Bulow, Jeremy. "WHat are Corporate Pension Liabilities?" Quarterly Journal of Economics, Vol. 97, No. 3, (August 1982), pp. 435-452, Contains only a subset of WP#402.

Users who downloaded this paper also downloaded these:
Coronado, Mitchell, Sharpe, and Nesbitt w13726 Footnotes Aren't Enough: The Impact of Pension Accounting on Stock Values
Bulow The Effect of Inflation on the Private Pension System
 
Publications
Activities
Meetings
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us