Basic division of pension systems, characteristics of pension systems and causes of crisis in the public pension systems are shown in this work. The work itself is mostly based on Croatian pension system through history, basic indicators of the system and pension reform and its results. Basic division of pension systems is done according to the way of financing on: pay-as you-go (PAYGO) system, also known by the name of system of intergenerational solidarity and system of current payment; systems of capitalized savings and book reserving. In this work characteristics of PAYGO systems and systems of capitalized savings, as well as their differences, are explained in a more detailed way. After introduction with the causes of crises in public pension systems, a short overview on the Chilean pension reform is given here, as well as the recommendation of the World Bank for the reform of pension system. In continuation, there is a short overview of history of Croatian pension system with the reasons for conducting pension reforms. The results of the pension reform are also shown. Aforementioned results are shown through its influence on: pension expenses, national savings, administrative expenditures of the pension system, development of the capital market and social effects.