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| Author: | Klumpes, P. J. M. Whittington, M. |
| Title: | Determinants of Actuarial Valuation Method Changes for Pension Funding and Reporting: Evidence from the UK |
| Journal: | Journal of Business Finance and Accounting
2003 : JAN-MAR, VOL. 30:1-2, p. 175-204 |
| Index terms: | FUNDS PENSION FUNDS METHODOLOGY UNITED KINGDOM |
| Language: | eng |
| Abstract: | This study examines various factors that potentially explain cross-sectional variations in UK corporate managerial discretion to switch towards a market-based actuarial pension valuation method for pension funding and reporting purposes. Evidence is based on accounting, actuarial and share market data for an industry-matched pair sample of 90 UK firms. Consistent with their hypotheses the authors find that companies have a greater propensity to switch actuarial methods if they use lower discount rates, lower flow funding ratios and sponsor larger pension plans in the pre-switch valuation year. These findings are consistent with the traditional perspective, which implies that UK corporate switching decisions are explained by characteristics of their defined benefit pension funds. |
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