The social security program is usually prominent in the USA. It was first issued in 1935. Before, the social security was used as a form of identification for citizens and working members in the state. It was also used in the military in identifying individuals. However, it cannot be used entirely as an identification card since no picture of the holder is attached to it.
A pension plan is usually a tax-free contribution made by an employee to a payment category aimed at looking into the future of the employees. In the case of entitlement program, both employee and employer make contributions, and these contributions have deductions. These arguments make social security to be more of an entitlement plan because it is all about taxation. This, however, goes against the preferred use of social security which was never meant to be an entitlement program.
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First, the FASB proposed that the retirement benefits plan costs be calculated on a net basis. The proposal stated that costs should be reported together with salaries received by the subject for the services offered. The other costs would have to be reported independently. In the other proposal concerning reporting, FASB saw the need to help their employees give information about their material possessions in a case where they would choose to exclude them.
There is a large number of individuals entering the retirement phase. A research done in 2014 showed that about 80 million individuals retired. This puts pressure on a small number of individuals to pay their retirement benefits. In the US alone, there is a huge debt to the tune of trillions of dollars, and this arises from debt payments. These debts could make the government unable to pay social security’s making them insolvent.
In the United States, the social security is a financial plan aimed entirely at retirement of workers. In the UK however, this plan is a little different. Individuals in the UK make contributions to the social security plan but do not have to wait until retirement to claim a sum. In case of emergencies, an individual can claim financial compensation from the sum they have contributed.
Despite the problems that the social security plan faces at times, it is bound to become better. With better legislation and implementation of upgrades, it will be more reliable. More countries are in the process of acquiring the social security plan used in the United States.
