Pension funds have greater fiduciary responsibilities than mutual funds and are also more severely punished for poor performance. Thus pension funds may find it particularly risky to deviate from peers. Consistent with this view, we find that pension funds herd and that their herding negatively...

Using most recent firm level data over the period 1986-1994, this study examines the stock market reaction with respect to pension plan type (defined benefit or defined contribution) established following the termination of an over funded DB plan. Generally, we find support for the separation...