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4 definitions by Septimus Severance

(FINANCE) Securities Exchange Commission; agency of the US government responsible for regulating the issuance and trading of stocks.
When a company wants to raise more money by issuing stock, it has to file with the SEC.
by Septimus Severance September 02, 2010
(BUSINESS) Employee stock ownership plans are qualified retirement plans designed to invest in the stock of the companies that adopt them. The idea is that by participating in these plans, employees become, over time, owners of their own employers. However, in most cases employee ownership does not translate into employee control.

ESOP's are usually set up as an employee benefit trust; the employees' retirement pension fund is invested in shares of the company. ESOP contributions are tax deductible, so the company basically gets a tax break for its employee benefits. The downside of this is that the employees are totally dependent for their retirement on a single company, rather than many (as with an ordinary pension plan).
In 1974, the US Congress passed ERISA. This imposed rules for the organization and vesting of pension plans. It established rules for setting up an ESOP. Eventually, thousands of ESOP's were set up.

Sen. Russell Long (D-LA) managed to use his senior position and powerful connections to push for laws that promoted ESOP's. The immense tax advantages caused ESOP's to be widely adopted. Later, those provisions were eliminated but the ESOP's remain.
by Septimus Severance September 04, 2010
(acronym) to all intents and purposes
A common talking point that Stephen Jobs is peculiarly entitled to his entire fortune, because Apple Computer is TAIAP a manifestation of his will, and the other members of that organization contribute only modestly to its success...
by Septimus Severance November 07, 2011
(U.S. GOVERNMENT) Employee Retirement Income Security Act (1974); federal law that sets minimum standards for most voluntarily established pension and health plans in private industry to provide protection for individuals in these plans.

Very important law was supposed to ensure that employer pension plans were (a) managed by qualified, ethical people, and (b) those people did not take excessive risks with the funds paid into the pensions.

ERISA was subsequently weakened by a Department of Labor ruling in 1978 that allowed pension fund managers to invest in riskier types of portfolios. At the same time this occurred, financial managers were stuck with negative real interest rates, and high inflation. So there was an urgent need for financial vehicles with high yield.

As a result, pension fund money flowed into the new hedge funds and junk bonds.

Another major change to ERISA was the Consolidated Omnibus Budget Reconciliation Act (COBRA-1986) allows workers recently unemployed from a job to keep their group health insurance coverage for a limited period of time.

ERISA regulations for vesting pension benefits were watered down during the '90's, resulting in massive risk taking and erosion of income security for middle class Usonians.
Because the 1978 changes in federal policy were correlated with the flows of venture capital while the 1986 change was not, it seems reasonable to infer than the ERISA ruling was probably more important than the reduction in the capital gains tax in stimulating the flow of venture capital in 1978.

{William D. Bygrave, Jeffry A. Timmons, *Venture capital at the crossroads* Harvard (1992), p.272}

In most years since 1986, Congress has passed revisions to ERISA; during this time, voluntary pension funds have become a tool of economic policy management.
by Septimus Severance September 05, 2010