Third party pensions have failed so Blockchain is taking over

Getting old and retiring is a fact of life, whether people like it or not. It’s also safe to say that most would prefer a long, happy, affluent retirement over the alternatives.

For this reason, pensions are a big source of worry for many people. A well-funded, secure pension is the ticket to a comfortable and stress-free retirement, and not having a pension is a recipe for uncertainty and anxiety.

And as humans live longer than ever before, pensions are only going to get more and more important and necessary as time goes on. Unfortunately, the current system is broken, and third-party pensions aren’t up to scratch. That’s a problem because right now far too many people are reliant on third parties like corporations and governments for their pension.

Before we discuss the possible solutions to this, it’s necessary to take a look at why the current pensions infrastructure is in such a mess.

The problems with pensions

Too many people today are putting their faith in institutions that aren’t reliable when it comes to handling their pensions. Take social security, for example. Huge numbers of people around the world are pretty much entirely dependent on the state for their retirement funds. In America alone, 35% of people over 65 rely almost entirely on social security.

That’s worrying, because 56% of current retirees believe the U.S. government will cut their social security benefits. It’s not exactly an unfounded fear, because state pensions aren’t looking secure at all.

According to the World Economic Forum, there was a retirement savings gap of $70 trillion in 2015 — a number that is predicted to grow by $28 billion every 24 hours. That’s spread between eight of the world’s biggest economies, so this isn’t a problem that’s confined to one particular country — everyone’s in trouble.

Many people are aware of the problems and look to private pension funds as the answer. But corporate pension funds are also struggling. U.S private pensions have only 82% of the necessary funds to meet their liabilities.

There’s also a growing lack of trust in private companies. Scandals where corporations have failed to protect their employees’ pensions tend to stick in people’s minds, and concerns about corruption and fraud are just another thing to add to the bundle of worries everyone has about pensions.

Authorities seriously need to rethink the way society does pensions, globally. That could mean moving to a system where people are given the means and knowledge to manage their own pensions without having to rely on third parties that seem shaky at best.

One of the ways to achieve this could be by using blockchain technology to build a more decentralized model.

Decentralizing the pensions infrastructure

Our societies are getting older. Advances in health and medicine are allowing individuals to live longer lives. Many expect to live for decades more after retiring, hoping to be able to enjoy this time to the fullest. Preparing financially is a must.

However, pensions – the most common means of retirement planning – isn’t as reliable now as some may hope. Pension funds all over the globe are undercapitalized. Many have been victimized by fraud and corruption. These funds may not be able to pay out the next generation of retirees.

As such, people urgently need a more stable and secure system to save up for retirement. Blockchain technology could well be the way to achieve that.

Akropolis is a new blockchain-based platform that aims to change the way people manage their pensions. It advocates a more decentralized system where users can be in charge of their own retirement funds instead of relying on organizations to do it for them. They will be able to select their preferred pension products rather than be forced to join one.

By using blockchain, the platform also helps tackle the issues of fraud and corruption. Blockchain records are transparent and unalterable. Transactions can be tracked every step of the way so it’s easy to spot foul play and address it immediately.

Akropolis aims to give users power over their own pensions and freedom from unreliable and possibly doomed structures like state pensions and corporate funds. It’s a new way of looking at things, one which gives individuals greater control.

Blockchain technology could well be the way to achieve that and it’s one important step towards averting a pensions crisis that’s getting bigger every day.