||The aim of this study is to analyze and assess the czech system of pension funds. The first part of the study is dedicated to a detailed description of the system and it focuses on its imperfections. Firstly, the paper describes these imperfections, secondly, it talks them and their consequences through. Moreover, it outlines their possible treatment, which - as we conclude – wouldn’t be any complicated. In the first part of the paper we state that the function of the state in the system (either state subsidy or state regulations) is not only far too important but also wrongly oriented. This finding is strenghtened in the second part where we estimate state costs related with private pensions. The adequate role of the state in the system in contemporary institutional background is discussed subsequently.