pension parachute

pension parachute definition - business

pension parachute

A pension agreement stating that, in the event of an unfriendly takeover, a firm can use any surplus pension assets to increase pension benefits. A pension parachute is used to make the firm less attractive to takeover, for it prevents the acquiring company from using the excess pension assets to help finance the acquisition.

The American Heritage® Dictionary of Business Terms Copyright © 2009 by Houghton Mifflin Harcourt Publishing Company. Published by Houghton Mifflin Harcourt Publishing Company. All rights reserved.

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