TY  - JOUR
AU  - Marcus,Alan J.
TI  - Corporate Pension Policy and the Value of PBGC Insurance
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 1217
PY  - 1983
Y2  - October 1983
UR  - http://www.nber.org/papers/w1217
L1  - http://www.nber.org/papers/w1217.pdf
N1  - Author contact info:
Alan Marcus
Finance Department
Fulton 334
Boston College
Chestnut Hill, MA  02467
Tel: 617-552-2767
E-Mail: alan.marcus@bc.edu
M1  - published as Alan Marcus. "Corporate Pension Policy and the Value of PBGC Insurance," in Zvi Bodie, John B. Shoven, and David A. Wise, eds., "Issues in Pension Economics" University of Chicago Press (1987)

AB  - This paper derives the value of PBGC pension insurance under two scenarios of interest. The first allows for voluntary plan termination, which appears to be legal under current statutes. In the second scenario, termination is prohibited unless the firm is bankrupt. Optimal pension funding strategy under each scenario is examined. Finally,empirical estimates of PBGC liabilities are calculated. These show that a small number of funds account for a large fraction of total prospective PBGC liabilities, that those total liabilities greatly exceed current PBGC reserves for plan terminations, and that PBGC liabilities could be substantially reduced by the prohibition of voluntary termination.
ER  -