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The Role of Public and Private Pension Funds in Creating Financially Sustainable Pension System 2012 364.35 http://ezaposleni.singidunum.ac.rs/rest/sciNaucniRezultati/oai/record/3/8223 B. Rakić M. Nikolić The traditionally formed public pension system that functioned according to pay as you go system became financially unsustainable in contemporary conditions. A problem in financing pensions has emerged due to the negative demographic and economic changes as well as too much of a generous attitude in the past. The growing number of pensioners opposed to a decreasing number of employees resulted in deficit of funds for pensions. In the situation of growing budget deficits and great pressure of international organization on its sustainability to certain level, governments could not cover these high deficits of the pension systems at the burden of budgets, so different reforms of pension system have been introduced in numerous countries. As individual functioning pay as you go financing systems and parametric reforms have not stabilized pension systems, a great number of countries have decided on a model that combines public and private pension systems, that is pay as you go and fully funded systems of financing. Some countries have done it by the Chile example and some by the World Bank model. The aim of this paper is to analyze characteristics, advantages and disadvantages of public, private and multi-pillar pension system, the experience in up to date reforms and on the ground of this analysis to suggest how a sustainable model of pension insurance should be formed. bookPart Faculty of Economics, University of Niš 131 145 Improving the Competitiveness of the Public and Private Sector by Networking Competences