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Pension benefit insurance and pension plan portfolio choice

Crossley, T and Jametti, M (2013) 'Pension benefit insurance and pension plan portfolio choice.' Review of Economics and Statistics, 95 (1). 337 - 341. ISSN 0034-6535

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Abstract

Pension benefit guarantees have been introduced in several countries to protect private plan members from the loss of income associated with the termination of an underfunded plan. Most such schemes face financial difficulty. Consequently, policy reforms are being contemplated. Economic theory suggests that such schemes will suffer moral hazard problems. We test a specific theoretical prediction: insured plans will invest more heavily in risky assets. Our test exploits policy differences across Canadian jurisdictions. We find that insured plans invest about 5% more in equities than do similar plans without benefit guarantees. © 2013 by the President and Fellows of Harvard College and the Massachusetts Institute of Technology.

Item Type: Article
Subjects: H Social Sciences > HB Economic Theory
Divisions: Faculty of Social Sciences > Economics, Department of
Depositing User: Jim Jamieson
Date Deposited: 12 Sep 2013 20:27
Last Modified: 17 Aug 2017 17:57
URI: http://repository.essex.ac.uk/id/eprint/7515

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