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 a pay-as-you-go system less sustainable, as fewer workers are available to support more retirees. This situation makes a savings and investment-based system more attractive, as it relies on individual savings rather than the current workforce's contributions.

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