On the Determinants of Defined Benefit Pension Plan Conversions |
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| Authors: | Kandice A Kapinos |
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| Institution: | (1) University of Michigan, Ann Arbor, MI, USA |
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| Abstract: | This study utilizes pension plan level 5500 data from the Department of Labor and Internal Revenue Service to investigate
the determinants of traditional defined benefit plan conversion to hybrid cash balance plans during the 1990s. Incorporating
the possibility of plan termination instead of plan conversion, the author finds a negative effect of plan funding status,
union status, the number of total defined benefit plans at the firm, and plan contributions on the likelihood of plan conversion.
The number of active participants and total defined contribution plans at the firm positively affect the probability of conversion.
Plans at firms with at least one union plan were less likely to terminate. Additionally, the number of defined benefit plans
at the firm and plan contributions had a negative effect on the likelihood of plan termination. Industry fixed effects were
significant in all specifications.
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| Keywords: | Defined benefit pension plans Cash balance pension plans Pension plan terminations Firm pension plan policy |
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