pension obligations

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Stocks are used to achieve higher expected returns, and, therefore, meet the pensionobligation in the future, while helping to lower expected pension costs.
Intuitively, a firm with large pension obligations and relatively low levels of funding will opt out of a market even when production is efficient.
In this sense, the government has not accomplished one of the main objectives of funding - to reduce its future pension obligations.
Thus, the accrual of new pension obligations from current labor services (the service cost) is the only piece of pension cost treated as a core expense.
The authors cite the government's large size as one rationale, though in most developed countries the total size of government relative to public pension obligations is modest.
Many private pensions are insufficiently funded, exposing workers to the risk of a loss should their employer cease operations and not be available to meet pension obligations.
The feedback model proposed in this paper implies that financial markets respond more to the timing of contributions than to changes in the level of pension obligations.
For example, an unforeseen increase in pension obligations would leave it illiquid and unable to meet its day-to-day obligations.
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