The correct answer is: D. Pay as you go
Public pensions are funded by a system of pay-as-you-go, in which current workers pay for the pensions of current retirees. This system is based on the assumption that there will always be enough workers to support the number of retirees. However, as the population ages, this assumption is becoming less and less realistic. As a result, many countries are facing a crisis in their public pension systems.
There are several problems with the pay-as-you-go system. First, it is not sustainable in the long run. As the population ages, there will be fewer workers to support the number of retirees. This will put a strain on government budgets and could lead to higher taxes. Second, the pay-as-you-go system is not fair to future generations. They will be paying for the pensions of current retirees, even though they may not receive any benefits themselves. Third, the pay-as-you-go system is not efficient. It is a system of redistribution, in which money is taken from workers and given to retirees. This system does not encourage people to save for their own retirement.
There are several alternatives to the pay-as-you-go system. One alternative is to move to a system of individual accounts. In this system, each worker would have their own account, into which they would contribute money throughout their working life. This money would then be invested and used to fund their retirement. Another alternative is to move to a system of defined contribution pensions. In this system, the employer and employee would contribute money to a fund, but the amount of the pension would depend on the performance of the fund.
The pay-as-you-go system is a system of funding public pensions in which current workers pay for the pensions of current retirees. This system is based on the assumption that there will always be enough workers to support the number of retirees. However, as the population ages, this assumption is becoming less and less realistic. As a result, many countries are facing a crisis in their public pension systems.