ESSAYS ON THE RELATIONSHIPS BETWEEN THE MANAGEMENT OF PRIVATE UNINSURED DEFINED-BENEFIT PLANS, SHAREHOLDER WEALTH AND CORPORATE CAPITAL STRUCTURE

This dissertation examines the relationships existing between uninsured private defined-benefit pension plans and their sponsoring firms. The study is partitioned into two segments each designed to examine a different type of corporate/pension plan relationship. The first segment examines the impact of terminating overfunded pension plans on equity securities. The existence of a wealth effect is measured using standard event study methodology and a sample of firms terminating overfunded plans during the period 1980 through 1984. The residual or excess equity returns are then analyzed by applying regression analysis to a series of testable hypotheses developed to identify the economic events generating the excess returns. The results of the study suggest that the amount of excess equity returns present around the termination of overfunded plans varies depending on whether the firm is terminating the plan pursuant to a divestiture and whether the termination occurred after the new termination guidelines went into effect in 1984.