This paper is linked to the debate that has reopened during the last few years on the viability and suitabilility of pay-as-you-go systems. We first offer a brief review of the main literature on the subject of applying the internal rate of return (IRR) when studying these systems. Then, after defining the concept of the IRR as applied to a contributor, this is extended to cover the system as a whole. Hence two approximate expressions are obtained which provide us with a complete idea of the demographic, financial and economic elements and the rules of application that have and influence on this rate of return. Finally, given that the resulting model enables the internal rate of return to be calculated very easily, by defining the basic parameters estimated or observed in the system, this is applied to determine the future financial viability of the General Social Security system in Spain.

Key words: pensions, population, Spain, viability.
JEL classification: H55, J11, J26.