Rational Decision Rules for Early Retirement Inducements Contained in Corporate Pension Plans

Authors

  • Jihad S. Nader Concordia University, Montreal

DOI:

https://doi.org/10.1016/1057-0810(91)90049-5

Abstract

This article presents a net present value (NPV) model of early pension subsi- dies. The model’s theoretical basis is the compensating differentials-lifetime contracts framework of the labor market setting which gives rise to pension plans. The NPV model effectively integrates early pension subsidies into the shareholder wealth maximization framework of corporate finance. Within this framework, the article develops rational decision rules for early pension subsidies, and employs these rules to provide a corporate finance perspective on the pension-wage tradeoff of the firm’s labor force. 77zeJournaE of Risk and Insurance, Vol. LVIII, No. 1 (March 1991), pp. 101-108. (Reprinted with permission of The Journal of Risk and Insurance.)

Published

1991-12-30

How to Cite

Nader, J. S. (1991). Rational Decision Rules for Early Retirement Inducements Contained in Corporate Pension Plans. Financial Services Review, 1(2), 183. https://doi.org/10.1016/1057-0810(91)90049-5

Issue

Vol. 1 No. 2 (1991): Financial Services Review

Section

Abstracts of Articles on Individual Financial Management

License

Copyright (c) 1991 JAI Press Inc.

Creative Commons License

This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.

Author(s) retain copyright and grant the Journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution-NonCommercial 4.0 International License that allows to share the work with an acknowledgment of the work's authorship and initial publication in this Journal.

This license allows the author to remix, tweak, and build upon the original work non-commercially. The new work(s) must be non-commercial and acknowledge the original work.