Affiliation:
1. University at Buffalo, SUNY
Abstract
ABSTRACT
In 2012, Congress passed Moving Ahead for Progress in the 21st Century (MAP-21), which changed the ERISA pension funding rules such that mandatory pension contributions decreased. Advocates for the bill argued that reducing mandatory contributions would increase firms' investment. In contrast, I do not find an average increase in investment among the firms benefiting from MAP-21. Rather, I find that firms either hold pension funding relief on their balance sheets as liquid assets or pay out pension funding relief to shareholders. To the extent that managers increase investment in response to MAP-21, it is concentrated in firms with weak governance or ineffective internal controls.
Publisher
American Accounting Association
Subject
Economics and Econometrics,Finance,Accounting
Reference51 articles.
1. Excess asset reversions and shareholder wealth;Alderson;Journal of Finance,1986
2. The cash flow sensitivity of cash;Almeida;Journal of Finance,2004
3. American Benefits Council. 2012. Create Jobs, Increase Investment, Strengthen Pensions, and Raise Revenue by Stabilizing the Pension Funding Interest Rate Rules. (May 15). Available at: https://www.uschamber.com/sites/default/files/legacy/hill-letters/Funding%20-%20Joint%20Company%20Letter%20May%202012.pdf
4. Firms' choice of estimation parameters: Empirical evidence from SFAS No. 106;Amir;Journal of Accounting, Auditing and Finance,1996
5. Determinants of funding strategies and actuarial choices for defined-benefit pension plans;Asthana;Contemporary Accounting Research,1999
Cited by
22 articles.
订阅此论文施引文献
订阅此论文施引文献，注册后可以免费订阅5篇论文的施引文献，订阅后可以查看论文全部施引文献