Research on the Aging Pressure and Declining Birth Rate in the Pension System

With the global aging population and declining fertility rates, pension systems are facing unprecedented pressure. As the proportion of the working-age population shrinks year by year, the shrinking number of contributors and the surging number of pension recipients create a sharp contradiction, leading to current pension revenue and expenditure shortfalls in some countries, even forcing them to rely on fiscal subsidies to barely maintain operations. Among existing pension systems, the pay-as-you-go system, based on the principle of "intergenerational support," is most significantly impacted by demographic changes. The balance between pension rights accumulated during youth and actual benefits received in old age is being disrupted, posing a serious challenge to sustainability. This article analyzes the impact of population aging and low fertility on pension systems, examines the sustainability of the existing pension system, and proposes policy recommendations, including raising the retirement age, optimizing pension investment structures, implementing fertility policies, and promoting the development of a multi-pillar pension system. Raising the retirement age must be accompanied by flexible adjustments to the job market to avoid exacerbating employment difficulties for older individuals. Optimizing the investment structure requires expanding diversified asset allocation while maintaining manageable risks to enhance long-term returns. The study concludes that only comprehensive institutional reforms and policy adjustments can effectively address the pension payment crisis brought about by demographic changes.