Risk-taking in pension and crashes:Firm-level evidence

Our study, using a large sample of U.S. firms between 1990 and 2013, found a positive association between pension risk-taking and future stock price crash risk. The impact of pension risk-taking on future crash risk is particularly significant in firms with low funding ratios and high default risks. Overall, our findings provide robust evidence that risk-taking in defined benefit (DB) pension asset management can predict future crash risk. Our study offers valuable insights for stakeholders and shareholders in evaluating firms with DB pension plans and for policymakers in protecting workers' retirement benefits and shareholder wealth.