Which of the following tends to increase the attractiveness of a retirement system based on savings and investment rather than pay-as-you-go principles?
A) a persistent increase in the number of workers relative to the number of retirees
B) a large number of workers relative to the number of retirees
C) a reduction in the number of workers relative to the number of retirees
D) a persistent increase in the life expectancy of retirees.

Question

Quizplus · Accepted Answer

A reduction in the number of workers relative to the number of retirees makes pay-as-you-go systems less sustainable, as fewer workers are available to support more retirees. This situation makes savings and investment-based systems more attractive, as they rely on individual savings rather than the current workforce.

Which of the Following Tends to Increase the Attractiveness of a Retirement