The basic old-age insurance for urban employees was evolved from the traditional pension system in planned economy. In the past two decades，the system has made great achievements.However，analysis based on the “affordability，adequacy，financial sustainability” show that：in a condition of “high premium rate，low level of security”，wide coverage，basic security，and sustainable can not have all，the system’ financial sustainability is facing severe challenge.Reasons of these challenges part from external factors such as transition cost，but the main cause is internal factors，the structure reason is the individual accounts is inefficient，the parametric reason is high threshold and low threshold coexistence.This paper makes the following recommendations：on the basis of repay the costs of transition，separate social pooling and individual accounts，reform parameters，establish diversified basic pension insurance system，improve the multi-pillar old-age income security systems to realize adequacy and sustainability.