Pensions are a mechanism to reduce the risks of poverty among the elderly and a means to ensure consistent lifetime income to maintain living standards throughout retirement; hence, pension policies have the greatest impact on the economic status of elderly people, and thus their risk of being affected by poverty and social exclusion during their lifetime.Public pension schemes have several characteristics that make the occurrence of social exclusion and poverty less or more likely—consumption-smoothing, redistribution, and insurance being the system’s main functions.It is of a great significance for pension systems to be sustainable, both fiscally and politically, in order to achieve their income-support objective. Ultimately, unsustainable pension systems can be an obstacle to fiscal stability and economic growth. As such, the pension system should promote the development of the labour market, suggesting that contribution rates be set at reasonable levels, and that pension programmes offer participants acceptable returns on their contributions so to provide incentives to participate. Owing to immediate pressure concerning the overall sustainability of the pension system model, mainly deriving from demographic changes, several post-communist countries, namely Macedonia, Croatia, and Bulgaria, have undergone various pension system-centered reforms.