In this paper, we study theoptimalcontributionrateof pay-as-you-go (PAYGO)pensionunder a Nash equilibrium between the participants and the government. Given the fixedcontributionrate, the participants of different cohorts chooseoptimalconsumption and asset allocation policies to achieve their objectives. Using the variational method, we derive the closed-form solution. The value function of the participants is monotonous with respect to thePAYGOcontributionrateunder constant population growthrat