The Pension Plan of Bethlehem Steel - 2001 PDF Download

Author: Peter Tufano
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ISBN:
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Languages : en
Pages :

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Book Description
SUBJECT AREAS: Bankruptcy, Compensation, Debt management, Employee benefits, Finance, Financial management, Investment management, Legal aspects of business, Liability, Pension plansCASE SETTING: Bethlehem, PA; integrated steel; $3,334 million revenues; 13,500 employees; 2001Bethlehem Steel's 2001 bankruptcy filing inspires an employee's daughter to evaluate her father's pension plan, weeks after September 11's tragedies exacerbated a weakening U.S. economy and just months before her father planned to retire. Battered equity markets and plummeting interest rates foretell a quot;pension crisis,quot; while the daughter discovers the history and government role in U.S. private defined-benefit pension plans. She tries to apply her newly acquired finance skills as an MBA student to estimate the pension plan's true asset-liability condition and to advise her father about his upcoming retirement from a historically dominant U.S. company that has lost its competitiveness to global producers.Teaching Purpose: To introduce: 1) defined-benefit, private pension funds; 2) characteristics of liabilities - discounting, duration, and convexity; 3) roles of risk and insurance in asset management; 4) asset-liability matching; and 5) market value balance sheets.