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Economic Consequences of Pension Bailouts: Evidence from the American Rescue Plan
Michael Dambra, Phillip J. Quinn, and John Wertz, via SSRN Apr. 20, 2023 56 pages. "Consistent with the [American Rescue Plan] inducing moral hazard, [the authors] find that [multiemployer pension plans (MEPPs)] increase risk taking in investment allocations, increase benefit payments, and increase administrative fees relative to single-employer pension plans which did not receive bailout funds. The economic magnitudes ... are significant, with MEPPs collectively increasing their holdings of high-risk assets by at least $10.1 billion. [The authors find] evidence consistent with MEPPs deploying opportunistic actuarial assumptions to increase the likelihood of qualifying for bailout relief." |
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