Financial sustainability is a crucial concept when evaluating and comparing public pension systems. Even if there are some attempts to improve the measure of thesustainability, the mostly used indicator is given by the ratio between the pension expenditure and the GPD. It may be recognised that this indicator does not take into account two factors that may cause a different impact of the pension expenditure on the public finance, namely the pension taxation and the contribution income.

Hence, the paper aims at studying a new version of the indicator concerning the sustainability, which considers the pension expenditure after deductions of the relevant taxation and the contribution income. The proposed index would represent a more suitable measure of the financial sustainability and facilitate comparisons between different countries of the impact of the actual financial cost on the public finance.