Distribution of Funding Ratios. Annual distributions of the funding ratios of pension funds, 2008–2016 (years 2007 and 2017 in the main text). Figure at bottom right shows pooled distribution including all pension fund observations for all years. The solid line shows the smoothed fit using a local 4th order polynomial kernel regression to the left and to the right of 100%. Binwidth of histogram and bandwidth of triangular kernel are based on the procedure by McCrary (2008). Bin at 100% omitted for polynomial fit. Figure shows spike exactly at the regulatory minimum (100%). The corresponding McCrary test for discontinuity between left and right of 100% (omitting the 100% bin) is positive and significant. The sample includes only private and public funds without state guarantees, and only includes funds with a funding ratio between 81.5 and 152.3% (0.5th–95th percentile range).