2_Letter, Acknoweldgement Exe Summary

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December 01, 2010

To

Director

Office of Placement and AlumniAmerican International University-Bangladesh

Subject: An authorization letter for submission of internship report.

Dear Sir

Enclosed is the report on Comparative Study on Retirement Plan between UnitedStates and Bangladesh which is submitted to you as an obligatory part of the

fulfillment of the internship program.

The entire report is based on practical experience on the American Retirement Benefit

Plan and its reporting rules and regulations. This report will help to have in-depthknowledge about the differences between US retirement policies and the policies used in

Bangladesh retirement plan. Your proper guidance also helped me to prepare this report.

I have tried my best to furnish all the things what I have learned at DataPath Ltd. Besides,

I collected the necessary data through structured & unstructured interviews, different

publications and related websites. I have devoted my effort to make the reportrepresenting the fact. I will be always available to interpret any issue regarding this

report.

Thanking you

Yours sincerely

______________

Mhabubur RahmanID# 09-92994-2

MBA (Finance)

American International University-Bangladesh

Approved By

______________

Mr. Roomee Tareque MoududAssistant Professor and Director

Office of Placement and Alumni

American International University-Bangladesh

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Letter of Endorsement

The Internship Report entitled Comparative Study on Retirement Plan between

United States and Bangladesh has been submitted to the Office of Placement &

Alumni, in partial fulfillment of the requirements for the degree of Masters of Business

Administration, Major in Finance, Faculty of Business Administration on December 01,

2010 by Md. Mhabubur Rahman,Id # 09-92994-2. The report has been accepted and

may be presented to the Internship Defense Committee for evaluation.

(Any opinions, suggestions made in this report are entirely that of the author of the

report. The University does not condone nor reject any of these opinions or suggestions).

______________________

ProfessorDr. Md. Shah AlamInternship Supervisor

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Acknowledgement

First of all I would like to thank Almighty Allah as I have completed the report in due

time. I am grateful to those people who helped me in completing the report. I want to bid

my heartiest thanks to my supervisor, Professor DR. Md. Shah Alam, American

International University-Bangladesh for his inspiration, guidance, valuable suggestions,

sympathetic advice and enthusiastic encouragement throughout my study work.

It is very difficult to complete such work without the co-operation of others. From the

very outset, my seniors, colleagues, Team leader, General Manager, International

Relationship manager and the President of Data-path Limited helped me by giving their

valuable time to provide me suggestions, answering my questions and helping me with

different documents and materials. My extreme gratitude goes to Mr. Jim Hudson

(President, Data Path Ltd) for giving me the opportunity to do my internship in the

organization. I also like to acknowledge Mr Adam Barker, International Relationship

Manager, July Business Services and Ashfaqur Rahman, General Manager, Data Path

Ltd. for precious support all the time. My special thanks goes to Jamil Uddin Khan, Team

Manager, (Allocations) who was the supervisor of this research and gave me valuable

suggestions to prepare this report. Thanks goes to Samir Majumder, Apu Ahammed,

Rashedul Hasan and other employees of Data Path Ltd and for giving support when I

needed.

Finally, I would like to thank my friends for their co-operation and honest suggestions.

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Executive Summary

This report explains different aspects of Retirement plan process in USA and Bangladesh.And by making a comparative study I tried to figure out how effective and well regulated

the USA Retirement Industry is and how much behind, unstructured we are in

Bangladesh in this Retirement Plan sector.

Initially the report describes about the USA Retirement procedure. There are some

distinct features of US retirement policy for which those are so much popular and widely

used by both government and non-government organization even in case of sole-

proprietorship. This saving policy is so much popular because of Governmental rules,

Peoples desire to save, Peoples right to know, Contribution to the national economy,

Contribution to the homeland economy. 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. The retirement plan also helps the employer to have Tax savings on

the profit of the organization.

The second phase of the report describes briefly about the Bangladesh Retirement

Industry. There are different types of pension system exists both in government and

private sector which are unorganized and fully unstructured. No proper guidelines for the

retirement benefits like Gratuity, Benevolent Fund, Government accommodation, group

insurance etc.

In the Third phase I tried to identify how USA and Bangladesh retirement policy differs

in some important points. The government rules, peoples right, contribution to the

economy, dependency, benefit amount etc. also differs.

Finally, based on the findings I made few recommendations like government should

concerned and sincere about protecting the right of the retired people. It may be possible

to bring in a structured policy if government changes or reshape the policy. This report

will help Bangladesh to improve their retirement provident fund as well.

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TABLE OF CONTENTS

Topic Page No.

Chapter 1: Introduction of Report

1.0 Origin of the Report 1

1.1 Rationale of the study 21.2 Problem Statement 3

1.3 Specific Objectives 3

1.4 Broad Objective 3

1.5 Methodology 4

1.6 Scope of the report 41.7 Data Collection 41.8 Limitations 5

Chapter 2: Company Overview

2.0 Introduction 6

2.1 History 6

2.2 Getting Started 7

2.3 Vision 7

2.4 Mission Statement 7

2.5 Core Values 8

2.6 Building Team 9

2.7 Building Strategic Partnerships 9

2.8 Service Offered 10-13

2.9 Enrollment Materials 13

2.10 Investment Advices 13

2.11 Organizational Structure 14

Chapter 3: U.S Retirement Plan Industry3.1 Background 15

3.2 Types of Retirement Plan is U.S 16

3.3 Define Benefit Plan 16

3.4 Defined Contribution Plan 17-18

3.5 Types of Defined Contribution Plans 19-26

3.6 Basic Plan Design 27

3.7 Contributions and Deductions 28

3.8 Basic Plan Document Language 29-38

3.9 Minimum Coverage Testing 39-40

3.10 Nondiscrimination Testing 40

3.11 Some Important Testing definitions 40-413.12 Actual Deferrals Percentage Test 42-43

3.13 If ADP/ACP test Fails 43-45

3.14 Allocations 46

Chapter 4: Bangladesh Retirement Plan Sector

4.0 Background 47-48

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4.1 Pension Systems 49

4.2 Types of Pensions 49-53

4.3 Pension In Private Sector 53

4.4 Retirement Benefit 54-57

4.6 Old Age Allowance Programs 57-58

4.7 Non Government Initiatives 58-59Chapter 5: Findings 60-64Chapter 6: Recommendation 65-68Chapter 9: Conclusion 69

Bibliography 70

Appendix 71

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Documents

2_Letter, Acknoweldgement Exe Summary