State of the global pension crisis is continuously deteriorating. The problems deserve a 360-degree solution, given the significant diversity in countries’ regulatory and social policies. Moreover, the pension industry has less stringent regulations compared to the banking and insurance sectors. It can be described to have a “too big to fail syndrome”.
The World Economic Forum estimated that the pension deficit would reach to $400 trillion by 2050. China’s pension expenses, for example, rose to 2.58 trillion Yuan in 2016. Similarly, the US state pension plans are stated to have $2.6 trillion to cover an increasing liability of $4 trillion. Meanwhile, UK has an estimated $4 trillion retirement savings deficit, with a projected hike of 4% per annum to reach $33 trillion by 2050.
Akropolis announced in June 2018 that it would soon initiate the Initial Coin Offering (ICO) program. The objective is to generate a massive smart contract-based pension fund infrastructure powered by blockchain.
According to CEO and Founder Anastasia Adrianova, a former Lehman Brothers equity investor,
“I wanted to come up with a solution that would provide for the decentralised custody, an auditable track record that is accessible to relevant stakeholders and a single immutable source of truth. Naturally, this lead us to explore blockchain technology,” as reported by Forbes.
Adrianova is an advisor for Web3 Foundation, advisor and investment committee member of EU industrial IoT incubator, and a member of Blockchain Ecosystems Network. For her, the existing pension crisis can get solved through blockchain.
The global interdependence and critical long-term obligations describe the complexity of the pension industry. Adrianova’s vision on a blockchain-based pension ecosystem saw significance in:
- Transparency of a decentralised ledger which stimulates the integrity of pension plans
- Convenience for the beneficiaries to shift from one provider to another, since every pension development gets logged on the ledger
- Security in the absolute delivery of funds to the recipients, eradicating the risk of fund seizures or hidden costs
Speaking of the current pension scheme, Adrianova explained, “The pensions system is simply no longer functional. Cost inefficiencies are decimating savers’ pots, mismanagement is rife, and programmes are mired in complexity. Meanwhile, retirements are getting longer and more expensive as life expectancy rises. Individuals who have contributed to funds for decades are stuck in schemes which may not deliver their pensions. Meanwhile, alienated younger generations struggling with soaring rents and property prices aren’t saving enough for the future,”
Akropolis aims to overcome, if not mitigate, the catastrophe that the pension industry has been experiencing for some time, and which has continuously brought economic consequences globally
