Welfare Reform on the Web (December 2009): Pensions - UK

The influence of pension plan risk on equity risk and credit ratings: a study of FTSE100 companies

D. McKillop and M. Pogue

Journal of Pensions Economics and Finance, Vol. 8, 2009, p. 405-428.

This article looks at the relationship between funding risk of defined benefit plans and corporate debt ratings and equity risk measures for FTSE100 companies. Finds a direct relationship between pension plan risk and equity risk, and that the greater the pension risk the more likely it will get a lower debt rating.