The elusive relation between pension discount rates and deficits

Armitage, Seth, Gallagher, Ronan and Xu, Jiaman ORCID: https://orcid.org/0000-0002-3969-0841 2023. The elusive relation between pension discount rates and deficits. Journal of Business Finance & Accounting 50 (7-8) , pp. 1101-1127. 10.1111/jbfa.12658

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Abstract

The relation between defined-benefit (DB) pension discount rates and funding status is more complex than it might first appear. Existing evidence suffers from estimation biases that make precise inference unreliable. We document the biases and quantify their impact on inference in relation to corporate window-dressing of DB funding status. Our empirical evidence from the United Kingdom suggests that pension sponsors use discretion in the choice of pension discount rate not only to reduce reported deficits but also to reduce reported surpluses.

Item Type:	Article
Date Type:	Publication
Status:	Published
Schools:	Business (Including Economics)
Publisher:	Wiley
ISSN:	0306-686X
Date of First Compliant Deposit:	13 December 2024
Date of Acceptance:	31 August 2022
Last Modified:	13 Dec 2024 11:29
URI:	https://orca.cardiff.ac.uk/id/eprint/174581

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