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I am typing the question for the benefit of others.
Unlike a funded pension system, in which contributions are invested to pay future beneficiaries, a pay-as-you-go approach is the foundation of Social Security.
(A) a pay-as-you-go approach is the foundation of Social Security
(B) the foundation of Social Security is a pay-as-you-go approach
(C) the approach of Social Security is pay-as-you-go
(D) Social Security's approach is pay-as-you-go
(E) Social Security is founded on a pay-as-you-go approach
Unlike A system, based on B, C system is based on D - This is the main context of the sentence.
A is wrong because it changes the meaning. A's construction is similar to this one
Unlike A system, based on B, D is the foundation of C system - The two items compared are not similar, we should compare the two systems. Hope this helps !!!
IMO E.