Pension experts have long conjectured that pension accounting rules encourage firms to invest pension assets in risky asset classes (Zion and Carcache 2003, Gold 2005). The recent passage of IAS 19 Employee Benefits (Revised) (hereafter, “IAS 19R”) marks a fundamental shift in pension...

The discount rate represents a critical choice in accounting for corporate defined-benefit pension plans due to the long-term nature of pension liabilities. U.S. GAAP and IFRS mandate the AA corporate bond rate. Their requirement is subject to much debate, with the risk-free rate and the...