Taxation and Corporate Pension Policy

Authors

  • IRWIN TEPPER

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    • I am grateful to Fischer Black (especially), William Sharpe, Jay Light, William White, and participants in the Finance Research Workshop at the Harvard Business School for helpful discussion and suggestions.

ABSTRACT

This paper focuses on the impact of taxes on optimal corporate pension policy. The analysis is based upon an integration of corporate and individual shareholder considerations. The major conclusions are that a company should fully fund its pension plan and should invest the pension fund totally in bonds.

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