pension risk disclosure in FTSE100 firms

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wang, yilin (2013) pension risk disclosure in FTSE100 firms. [Dissertation (University of Nottingham only)] (Unpublished)

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Abstract

Pension risk reporting is attracting attention from investors, regulators and corporations. The IASB, ASB require principle actuarial assumptions, the funding status etc. to be disclosed in the annual reports. However, these regulations are not mandatory. The investors need more risk related information to adjust their investment strategy. Corporations, on the other hand, either want to signal their pension risk management skills or hide risks from the public. Under this circumstance, we find a varied level of risk disclosure among FTSE100 firms.

In this research, we investigate the relationship between the pension risk disclosure quantity in the corporate annual reports and the proportion of independent directors, the market-to-book ratio, the funding ratio, the banking industry dummy variable and the pension scheme size. We find that the coefficients for independent directors are insignificant and thus this study puts forth that independent directors do fulfill their functions in facilitating the pension risk disclosure level. Concerning the market-to-book ratio, there is a mix of results but market-to-book ratio can be partly confirmed in promoting risk disclosure degree. The finding that the funding ratio does not contribute significantly to the risk reporting is contradictory to O’Brien et al’s recent study on pension disclosure. Separate investigation on banks partially reveals that banks tend to disclose more than firms in the other industries. However, the pension scheme size is found to be significant in more pension risk reporting. This supports O’Brien et al’s prior conclusion on the pension scheme size for its importance in risk disclosure.

KEYWORDS: pension, risk disclosure, FTSE100

Item Type: Dissertation (University of Nottingham only)
Depositing User: EP, Services
Date Deposited: 28 Mar 2014 16:38
Last Modified: 19 Oct 2017 13:38
URI: https://eprints.nottingham.ac.uk/id/eprint/26687

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