The reason for the analysis of the pension system of the Republic of Croatia as a subject of thesis is found in the problems and challenges facing the pension system. The purpose of the proposed diploma paper is to highlight assessment of the situation and the future of the pension system in Croatia, and special attention is given to reviewing the adequacy of pensions. The analysis of the adequacy of pensions will display the ratio of insured persons and pensioners, demographic trends, and the deficit of the pension insurance. Projections indicate that pensions which are paid on the basis of security of both pillar to be significantly lower than pensions that are paid on the basis of participation only in the first pillar. In terms of fiscal balance is projected to reach deficit reduction that will be achieved by savings on the expenditure side, which means reducing the relative amount of pension compared to the average salary. There are a number of reforms to achieve adequacy of pensions and possibility of higher pension with moderate fiscal costs if society and citizens will responsibly share the burden of responsibility forincome in old age. As data sources will be used secondary sources of literature, available official publication.