Pension Funds and the Required Minimum Funding Ratio: A Research on Earnings Management in Dutch Pension Funds

This paper suggests that the financial crisis, which made itself felt at end of 2008, gave company pension funds in the Netherlands cause to manage the funding ratio, in order to prevent it from dropping below the level of the required minimum funding ratio. On the other hand, industry-wide pension funds have not managed their funding ratio. Possible explanations are: the (stronger) involvement of social partners, and the greater social and political visibility of industry-wide pension funds. In addition, the sponsor of a company pension fund usually sits on the Managing Board of the pension fund and, in this way, is able to exercise influence on the policy of the pension fund.