The Demand And Supply Of Financial Services For Retirement System Of United States

1382 Words Oct 6th, 2015 6 Pages
The purpose of the paper is to provide a better understanding of the demand and supply of financial services for retirement system of United States, with a specific focus on the needs of small businesses.
1.2 ACRONYMS
DB – Defined Benefits
DC – Defined Contribution

2 BRIEF HISTORY OF RETIREMENT PLANS
Until the late 19th, the idea was to work until you die or until you can’t work anymore. However, in 1889 a German Chancellor Otto vin Bismarck introduced in Germany the pension plans, not because he was compassion for the working class but because he wanted to pre-empt a growing socialist movement in Germany before it grew more powerful. Later, the idea of providing financial security for aged gradually expanded in Europe, United States and other advanced economies.
In 1875, American Express offered America’s first employer-provided retirement plan. Five years later, the Baltimore and Ohio Railroad introduced the first retirement plan, financed jointly by contributions from an employer and its workers.
After World War II, as life expectancy reaches lengths American government couldn’t have imagined, United States started struggling with government pension plans they can no longer afford. Therefore, private plans became more common.

3 DIFFERENCE OF RETIREMENT PLANS
There are many types of retirement plans but the most common are Defined Benefits Plan, most known as pension plans, and Defined Contribution Plan.

3.1 DEFINED BENEFITS PLANS
It is an employer-sponsored retirement…
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