The pension system represents a branch of social security based on generational solidarity which is conducted by the Croatian Pension Insurance Fund (HZMO) and individual capitalized savings and it is considered very important part of social security. The importance of the pension system rests on the fact that it directly affects larger number of people and most likley all citizens will use it. Until the form of pension system is today, several reforms were needed, so these reforms are aproached very cautiosly and with good consideration. More than twenty years have passed since the most important reform, the creation of three-tier pension system that is till this day still in force. In 1999., the public pension system was unified for workers, artisan and farmers. It was then suplemente din 2002 with mandatory and voluntary pension insurance based on individual capitalized savings, regarding the II. (second) and the III. (third) pension pillars. The first pillar is called the pillar of generational solidarity and, together with the second pillar, is part of compulsory insurance. The third pillar is entirely voluntary. The total amount that the insured person allocates from the contribution is 20% of his own gross salary, where 15% is paid into the first pillar, and the rest, which is 5%, is allocated to the second pillar. The insured person also has the option to pay the entire amount of 20% only in the first pillar. The pension system is designed in such a way that it is primarily financed from contributions and only then from the state budget. However, the situation in the Republic of Croatia is currently such that the number of people in retiremen is constantly increasing, which aggravates the system in which payments from contributions should finance the payment of pensions. The pension system is becoming increasingly dependent on financial assistance from the state and the system is becoming unsustainable.