Dictionary of Finance and Investment Terms: pension parachute
pension parachute
pension agreement that specifies that in the event of a hostile takeover attempt, any excess assets in a company pension plan can be used for the benefit of pension plan participants, such as increasing pension payments. This prevents the raiding firm or individual from using the pension assets to finance the takeover, and therefore acts as an additional deterrent to help the firm ward off the acquisition. A pension parachute is a form of poison pill.
