Impact of Pension Plan Risk on Cost of Debt and Equity in Companies with Pension Plan Assets

摘要

This study analyzes the effect of pension plan risk on cost of debt and equity in companies with pension plan assets based on the value of pension liabilities, the difference between value of pension assets and liabilities, and the difference between risk of pension assets and liabilities. 177 observations consisting of Non-financial companies listed on Bursa Efek Indonesia from 2012 to 2014 were included in the study. From the study, it was shown that there is no significant effect of pension plan risk on cost of debt and equity based on all the three measurements. Investors and creditors in the Indonesian capital market had low information on pension plan risk, therefore they do not account for such risks when making investment decisions.