Abstract
UK companies have been making large contributions to reduce the deficits of their pension funds, and are believed to fund such contributions in part by reducing dividends. Using data from 2003-16, we find little evidence that large deficit-reduction contributions are associated with reductions in regular dividends, though we find some restraint in dividend increases and total payout. Most companies make large contributions when they have healthy cash flows and strong profitability, or inflows from disposals of assets. This suggests that the Pensions Regulator allows companies flexibility regarding the timing of contributions.
Original language | English |
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Pages (from-to) | 27-42 |
Number of pages | 15 |
Journal | Journal of Corporate Finance |
Volume | 58 |
Early online date | 5 Apr 2019 |
DOIs | |
Publication status | Published - Oct 2019 |
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Dive into the research topics of 'Are pension contributions a threat to shareholder payouts?'. Together they form a unique fingerprint.Profiles
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Seth Armitage
- Business School - Professor of Finance
- Accounting and Finance
Person: Academic: Research Active
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Ronan Gallagher
- Business School - Senior Lecturer
- Accounting and Finance
Person: Academic: Research Active