National Pi Day

Today, March 14th is Sarah, my youngest daughter’s, birthday.  She has assured me over the years that this is a significant holiday that should be properly recognized.  It turns out that she is correct as March 14th is National Pi day.  In fact, this year marks the 26th anniversary of celebrating all things pi. 

ESOP Calendar

So what’s the deal with Pi anyway?

For those of you like me that haven’t taken a math class in decades, Pi is the ratio of the circumference of a circle divided by its diameter. It is approximated at 3.14 (which means that the distance around the circle is 3.14 times the distance across the circle) although the actual number has been calculated to ten trillion digits (1013).

For mathematicians (and realistically everyone) pi is a big deal.  In addition to its importance in geometry and trigonometry, it is important in statistics, thermodynamics, mechanics and electromagnetism to name just a few.  It is clearly not just another number.

ESOPs have a pretty important number as well

Employee Stock Ownership Plans (ESOPs) also have a number that is a pretty big deal – their annual valuation.  The Employee Retirement and Income Security Act (ERISA) requires that an ESOP obtain an independent valuation of the company each year.  This valuation serves multiple purposes:

  • Provides a critical input for participants to value their account and plan for retirement
  • Allows the proper number of shares to be allocated to each participant’s account if any contributions are made
  • Allows distributions to be properly valued for participants
  • Provides a value to the trustee for validating any other transactions with parties outside the ESOP

No surprisingly, the announcement of the share value is a highly anticipated event at many ESOP owned companies.  After all, it is a big deal.

For those of you that are interested, here are the first 100 digits of pi:

3.14159265358979323846264338327950288419716939937
51058209749445923078164062862089986280348253421170679

For those of you that want even more, the following link will take you to pi to the 100,000th digit.

http://www.geom.uiuc.edu/~huberty/math5337/groupe/digits.html

***

In addition to blogging here, I also tweet regularly about topics of interest to ESOPs. Click to follow me on Twitter –  @jlripperger.

Click here to follow my ESOP blog

Affiliation Disclosures

While this communication may be used to promote or market a transaction or an idea that is discussed in the publication, it is intended to provide general information about the subject matter covered and is provided with the understanding that none of the member companies of The Principal are rendering legal, accounting, or tax advice. It is not a marketed opinion and may not be used to avoid penalties under the Internal Revenue Code. You should consult with appropriate counsel or other advisors on all matters pertaining to legal, tax, or accounting obligations and requirements.

Insurance products and plan administrative services are provided by Principal Life Insurance Company a member of the Principal Financial Group® (The Principal®), Des Moines, IA 50392.

t14031003n5