Pensions were started as an incentive for people to enlist in the military. Plymouth colony offered one of the earliest pension plans to people who were disabled while defending the colony from Native Americans in 1636.
The first pension law was established during the Revolutionary War. However, the states fulfilled their pension obligation to only about 3,000 veterans. The U.S. Federal government then passed legislation in 1789 that made the government, instead of the states, responsible for paying pensions to disabled veterans. Following this legislation, the government steadily increased pension benefits as the country became more wealthy. When these benefits started they were only offered for a few years, but in 1818, pensions became a lifelong benefit.
Public pensions were then started in the 19th century as a way to motivate federal employees who were not in the military to become permanent civil servants. They were also started as a way to appease the demands of civil workers who were calling for an expanded welfare state. During this time, people were chosen on a case-by-case basis to receive pension benefits. The government started to offer pensions to every federal employee in 1920. This pension program is known as the Civil Service Retirement System.