Pension Parachute

Description of Pension Parachute. Explanation.

Definition Pension Parachute. Description.

A Pension Parachute is in corporate finance an anti-takeover mechanism whereby the hostile acquirer of the target firm is prevented from utilizing the pension assets to finance the acquisition.

Thus the cash reserves in the pension fund of the target company are protected from unfriendly acquirers; they remain the property of the participants in the pension plan in the target company.

Compare with: Anti Hostile Takeover Mechanisms

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End of description Pension Parachute. An explanation.