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Blockchain to fix the dysfunctional pension systems worldwide

19 Aug, 2018
by Fifi Arisandi
News
Blockchain to fix the dysfunctional pension systems worldwide

A former Lehman Brothers private equity investor evokes an awareness of the pension crisis in the US and around the world and believes that blockchain technology can solve the problems.

A study by The Pew Charitable Trusts revealed that various states in the US don’t have enough fund to pay the promised benefits to government workers. In numbers, the state's pension plans only had $2.6 trillion on hand for $4 trillion cumulative liability to be paid.

The sad reality is not only happening in the States, with the UK is estimated to have US$4 trillion retirement funds shortage and the Chinese government to owe 429.1 billion Yuan (US$62 billion) of pension fund. With the numbers keep on growing each year, the World Economic Forum has predicted that the pension deficit will reach $400 trillion by 2050.

According to Anastasia Andrianova, a former Lehman Brothers investor, the first thing the state will do when an economic crisis happens is tap into pension funds or reserve. Based on her experiences working with several pension funds, Andrionova believes that lack of transparency is at the heart of the many problems facing current pension systems.

That’s why, she is convinced that the blockchain technology, will be the best solution for today’s broken pension system. The technology provides the transparency that the current system doesn’t have; furthermore, it offers an efficiency that would make the system works better.

Andrianova created her company, Akropolis to gather fund managers, institutional users, individual users and developers under a single ecosystem to provide increased transparency for pension funds.

“I wanted to come up with a solution that would provide for a decentralized custody, an auditable track record that is accessible to relevant stakeholders and a single immutable source of truth. Naturally, this leads us to explore blockchain technology,” she said in an interview with Forbes.

When implemented in the pension fund platform, the blockchain technology will ensure no single entity is able to control the ledger. The smart contracts will also ascertain the delivery of funds to beneficiaries.

Although the blockchain technology will help address the current pain points in the pension system, she’s aware that it will not solve all future problems. That said, she believes that decentralized pensions on blockchain are the best route to a safer financial future worldwide.

The blockchain technology has been said to be able to solve various issues the world is facing these days. The Russian authorities is planning to use it for voting, as reported by Chepicap just days ago. The Chinese government even appointed hundreds of companies to focus on developing blockchain-backed industry in the country. 

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