Retirement provident fund (RPF): a comparative analysis between USA and Bangladesh

Abstract

The US government is very aware and sincere about protecting the right of the retired people and securing them financially in retired life. The IRS (internal Revenue Service) and the DOL (Department of Labor) provides guidelines for the employer to manage the retirement benefit plan to give their employee retirement benefit which is known as “Plan” in the retirement industry. The retirement plan also helps the employer to have Tax savings on the profit of the organization if he maintains the plan according to IRS & DOL guidelines. Failure to comply with the regulations will result in disqualification of the plan and it will be subject to penalties. To promote the physical, financial and mental well-being of employees and their families, employers routinely offer benefits such as health and life insurance, vacation period, disability income and retirement plans. Employees also have come to expect benefits in addition to their salaries, employee benefit plan often provided instead of additional cash payments as an integral part of a total compensation package. The annual report of a retirement plan is called Allocations Report and is prepared by Third Party Administrators (TPA). Data-path Limited works for a TPA named July Business Services. The Bangladesh government is also concerned and sincere about protecting the right of the retired people. US and Bangladesh retirement policy differs in some important points. Bangladesh has policy for the government organization and very for private sector. And the government rules, people’s right, contribution to the economy, dependency, benefit amount etc. also differs. The employees are getting insufficient amount, no strict policy to reduce discrepancy between highly and non-highly compensated employees, no responsible organization for retirement policy etc. are the subject to modify. It may be possible to bring in a structured policy if govt. changes or reshape the policy. This report will help Bangladesh to improve their retirement provident fund as well.