Although pension finance theory says almost all defined benefit pension plans sponsored by publicly traded U.S. corporations should invest entirely in fixed income, 60% of assets are invested in equities. I offer a variation on the existing theory, removing the strong, but often unstated, assumption of transparency. The transparent (financial) model assumes that investors and managers view the pension plan as a portfolio of marketed assets and liabilities, a subsidiary of the operating parent, and subject to arbitrage. An opaque model holds that investors and managers view the plan in operating (accounting/actuarial) terms and value it based on earnings considerations. Defined benefit pension plans earnings (expense) are computed using actuarial methods and economic assumptions that systematically anticipate expected equity returns and strongly dampen the volatility of actual equity returns. Thus, corporations whose plans invest in equity overstate the financial value of their earnings and understate the volatility of such earnings. Under the transparent model, managers who invest in equities may be confronted by arbitrage arguments that show equity investment injures shareholders. Under the opaque model, these arbitrage arguments are not available and managers who invest in equities enjoy premium returns to risk while those who invest in fixed income are punished by higher costs with no apparent risk reduction.