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The leverage ratio is a frequently used measure of firm risk, utilized by firms, analysts, and investors. However, pension and other post-retirement benefits (OPRB) are largely ignored in determining a firm’s total liabilities. Similarly, pension and OPRB assets are not accurately incorporated into a firm’s total assets listed on the balance sheets. This is largely due to intricacies in pension fund accounting under Statement of Financial Accounting Standards (SFAS) No. 87 that can cause the true pension and OPRB liabilities and assets to be masked from the financial statements. SFAS No. 158 attempted to solve this problem, but while it has certainly mitigated it, it has not succeeded in mandating that the true asset and liability numbers are incorporated into balance sheet numbers. Furthermore, the rise in life expectancy has also increased the costs and presents a burden on firms’ activities (Taussig, RD (2024). Pension expenses, risk, and implications for stock returns. Finance Research Letters, 61, 105016). In this paper, we find that the measurement error in calculating leverage ratios may be significant if the leverage ratio does not accurately reflect the off-balance sheet items. We propose two new, innovative methods to correct this bias by adjusting “Total Assets” and “Total Liabilities” to properly incorporate pension and OPRB data. Our methods are more accurate since they encompass previously ignored footnote data. The implications are far-reaching, necessitating a closer look at previous research that uses leverage ratios as a factor.

There has been concern among the public and policymakers on the adequacy of Brunei Darussalam’s pension system, with particular emphasis on the returns generated. This paper will investigate the historical returns since 1993, comparing them with other countries as well as theoretical optimal asset allocations. The detailed financial statements, statistics and annual reports released by Tabung Amanah Pekerja (TAP) provide the basis for a robust assessment. This paper will then conclude with recommendations to improve the returns generated by Brunei Darussalam’s pension system.

This paper identifies, quantifies, and assesses fiscal risks in Bangladesh. By performing sensitivity analysis and using stochastic simulations, it measures risks arising from shocks to gross domestic product growth, the exchange rate, commodity prices, and interest rates. It also analyzes specific fiscal and institutional risks, including those related to the pension system, issuance of guarantees, state-owned commercial banks, and external borrowing and debt management strategies. The paper finds that fiscal aggregates are particularly sensitive to shocks to commodity prices and the exchange rate. Other factors that could affect fiscal aggregates are the unfunded pension system and limited institutional capacity.