pension sustainability

Pension sustainability refers to the ability of a pension system to provide promised retirement benefits over the long term without requiring excessive future funding. It depends on factors like the size of contributions, investment returns, demographic trends (such as aging populations), and the longevity of beneficiaries. If too many people retire with benefits that exceed the system’s income—due to higher life expectancy or lower contributions—it can become financially strained. Ensuring sustainability involves balancing these factors through policies like adjusting contribution rates, benefits, retirement age, or investing strategies to keep the system financially healthy for future retirees.