Reducing pension expenditures through delayed retirement

Steps:

• Identify transfer payments as government benefits like pensions without direct exchange, straining budgets with aging populations.
• Recognize aging populations increase pension demands as more retirees draw benefits longer.
• Evaluate policies: Seek one that shortens benefit duration or eligibility without shifting burdens elsewhere.
• Select option minimizing total payouts by extending working years.

Why C is correct:

• Raising the retirement age delays pension eligibility, reducing years of payments per retiree and total transfer burden, per standard fiscal policy on social security sustainability.

Why the others are wrong:

• A increases transfer payments to students, adding new burdens unrelated to aging.
• B maintains pension value against inflation, preserving or raising expenditures without reduction.
• D shifts funds from pensions to unemployment benefits, keeping total transfers unchanged.

Final answer: C