Excess pension asset reversions and corporate acquisition activity

This article examines the relationship between corporate acquisition activity and pension plan terminations that result in a reversion of surplus assets. We use a logit analysis to compare characteristics of terminating and nonterminating firms that held surpluses during the period 1980–1985. Our results indicate that reversions are more likely for firms that have larger pension surpluses, are less profitable, and are involved in acquisition activities. Pension reversions may have been used in corporate acquisition financing, as recent congressional investigations have inferred.