Brilliant Ideas on Resolving Pension Crisis by Participants of our Community Quest
In final rounds of the Quest we’ve asked the Community to share their views on what social problems can be tackled by blockchain most efficiently, and then list some major pitfalls of pension systems of their home countries together with the most outrageous stories of corruption and ill-managed decisions in pension realm.
Turns out, financial sector is the area that you guys believe to be demanding disruption for mostly. Here are some solid argumentative takes on blockchain’s potential to fix pensions:
For refugees who came from Syria, all of them currently lose their identities, their jobs and their assets. Most of them need to stay in refugee camp which is an inevitable place. They couldn’t find any job even they have graduated bachelor degree. Blockchain is a crucial solution, to keep their identity alive, more than that blockchain is used in refugee camp to distribute evenly food , water and clothes for everyone in the camp. This can solve mafia problems in the camp. In Thailand, some of retired workers have lost their identity. They couldn’t get any pension from government. I think government should apply blockchain system to keep every identity alive, so everybody could get pension they should have.
United States’ West Virginia took the first step and started the first-ever government-run, blockchain-mediated vote globally.
In the primary elections that concluded on May 8th, blockchain voting was trialed on a limited amount of people, namely deployed military members and Americans eligible to vote absentee under the Uniformed and Overseas Citizens Absentee Voting Act (UOCAVA), as well as their spouses and dependents.
First of all blockchain will help rebuild pension system. I hope to see a transparent system. You should easily get required data to see correct information. I’ll try explain by the example of Ukraine. Right now to get any information you should go to local Pensions center, fill papers, stand the queue, speak with “specialist”, get answer come back later because their system is frozen, etc. Painful procedure. The quality of the current electronic registry also leaves much to be desired. It should be simple way to understand your pension. What you have right now and what you will get in future. Right now we have complex formulas depends on type of work, years, etc. You receive this info and thinking — OMG, over and over again after next amendments. Also blockchain technology should provide solutions for further easy management of your pension savings. You should know exactly how much money you will get and when, how much left.
We received a number of striking insights from multiple countries giving a broad outlook on the real state of affairs globally. Here’s what @thebillionnet had to say about retirement crisis in Bulgaria:
I am going to write about solving pension problems by blockchain from my own experience from my grandparents. I am living in small country called Bulgaria. We have huge problem with corruption, and one of the biggest problems here is our pension system. I wrote the last time and I gave example with my grandmother, I am going to repeat myself. She had worked for 44 years as a taught in one of the biggest universities in Bulgaria, and now her pension is 137 EURO, yes you read it right, 137 EURO. I am not going to explain that you CANNOT live with 137 EURO per month, only her medicines is around 190 EURO. So in my honest opinion I think that the pension system based on blockchain is impossible to be corrupted with its transparent smart contract infrastructure. Everything stored on the blockchain is secure and transparent, so I think this is our future and that’s why I really find Akropolis as a unique project that will be helping the whole world in the next years.
Our contestant from India @saurabhblr shared his pension-related pains too:
India can be one of the biggest set of people you can get and solving the pension problem and making everyone accountable and removing fraud can be big step for us. That’s why I have lot of hope from Akro- please try to get a partnership with India govt-By maintaining shared decentralized ledger( using single ledger) helps to align stakeholders also you can easily handle org specific pension plan. And all transactions are verifiable in blockchain so this take care of fraud or wrong management of pension fund too. Only issue which I think is: as not all data can be public so Akro need to be cross-over of current blockchains and private chains- User privacy and user data is very important, we need to handle it carefully, public nature of blockchain may expose this all. So keeping a separate sidechain for User Auth and blockchain for public data like claim can do wonders’.
Ultimately, economically challenged countries seem to be in the biggest loophole. According to @Crypto_saint from Nigeria:
One of the most painful pension problem we face in Nigeria is lack of access to pension funds. Using my father as a living example, He retired over 20 years ago from the Nigerian Nations Shipping line. Ever since his retirement getting his pension have been a nightmare. When people retires, they are made to pass through so many rigorous process, travelling to different states, going to different offices begging for their funds and even getting insulted and humiliated in the process.The most pathetic part is when it seems the pension will be granted, after going through this humiliating process which take years the president of the country or a pension official may be changed and you hear things like “ the new president have not signed any budget for pension” “ Your formal entries are invalid now there are new changes”. Then you are made to repeat the process again. In the process many get frustrated, some starts work again, many die in poverty. Finally this funds are stolen by those pension officials and their cohorts.
However, it looks like European countries with more or less stable economy cannot boast decent pension provision either. @bityeezy on the situation in the UK:
The issue within the UK pension system is that political corruption/ineptness has resulted in large promises for pension funds being made that cannot be delivered upon. Retirees end up taking a lot less than they were expected to due to a lack of available funds by the government and money subsequently has to be borrowed from the banks hoping future interest rates will allow for a decent investment return. This is entirely based on speculation however and instead has been the cause of the £400 billion pension deficit that exists within the UK.
The solution to this I feel is a complete change in the current system from one where the government and corporations are blindly borrowing money hoping the problem will disappear in future to one of active initiative where the problem is addressed head on. The way this can be done is by the younger generation saving for their pensions earlier so as to alleviate the burden of pensions for themselves in future. This will also lighten the required pension toll on the government as the overall population grows and the debt repayment issue can then be addressed more appropriately rather than simply taking loan after loan. This system is one however which will require action on behalf of the entire British population and that the government will have to produce both awareness and incentivization for in order to succeed. Until this occurs however, I believe we will find the current system to heading for disaster, a situation that draws my utmost concerns for both myself in future and those affected currently.
More thoughts from France by @Titel974:
In France, active people think that they are working to finance their own pension. But actually, the money which the government takes monthly from their salary is used to pay the pension of the retired people of today. The system in place has to be changed (outdated due to people getting older and spending more money on medicines (which is also reimbursed by the government). The government has to find a way to explain to the active population the problem of nowadays system. They also need to find a way to do the transition without handicapping the current active population. They also haven’t decided which new system is the more adapt of the current situation. This is a promise which was made by Emmanuel Macron, the current French President. Not sure how he will resolve it.
In Round 3 we asked you to provide an article in your local media describing your domestic pensions crisis and/or ideas about solutions to them. Here are some briefs that we received.
From @Crypt0mata, Japan:
So it looks like Japan faces, similarly to Europe, a gigantic crisis due to the aging of population. The Government estimates population has to be of 100 million, also raise the retirement age to keep delaying the shrinking of active workers and boost the influx of foreign workers. This could result in the collapse of the national pension system as we know it.
From @abara_kedavra, Russia:
So the article is basically saying that increasing the retirement age to 63 years in Russia will lead to an increase in the number of unemployed. Now, after 50 years, it is rather difficult to find a job. Robotics and automation lead to a drop in demand for low-skilled personnel. The state is not able to retrain a large number of adults. The increase in supply in the labor market, together with the drop in demand, will lead to a shorter working week, a half-rate job, etc. The state will be forced again to change the retirement age and send people to retire early. The article proposes a solution in the form of introducing an universal basic income. But the article does not take into account that this leads to higher taxes on employees, and that so far no one in the world has successfully implemented such an experiment.
And finally, the Quest finale was about brainstorming some ways of how Akropolis Platform could be improved both in terms of economic efficiency and tech development. Here are our favorite ideas:
1. Automated investment diversification and risk management — by that I mean that I can go ahead and put in a form “”This is what I can afford to put in monthly, this is where I want to be in 40 years and this is my ethics (e.g. no money from weapons etc.). When I’m 25 I can afford a higher risk. At 50 I’d probably rather preserve my capital. This would help tremendously while not having to put too much time into managing my finances. I would want to use it to save time.
2. Automated/Guided compliance — since the Blockchain doesn’t belong to a jurisdiction (but I do) it would be tremendously helpful to be able to have tax, compliance and KYC handled in a automated fashion (preferably with the help of the blockchain and identity services on it like “”Civic”” which I suggested as a partner in an earlier round). I would want to use it (again) to save time.
3. Tracking of assets — Blockchain has the unique trait that it can have transparency as well as accountability without a huge investment into auditing. I would love to see pension funds use crypto assets as well as traditional assets that are tracked on the blockchain. So I can go “”ah my current portfolio includes x Abc Inc. shares as well as 5 BTC whenever I want to see it. I would want to use this as not to lose sleep at night :)
4. Verifiable Fund Managers — I assume if this project grows over the decades I would be using it there would be an overwhelming amount of possibilities to use the platform at some point. In order not to have to trust anyone it would be nice to have fund managers and other market participants have their KYC conducted on the blockchain as well. Again — I would want this for safety.
5. Ability to incorporate my own assets into the portfolio plan — I’m probably never going to put all of my funds in one basket. But still I would like to include all my assets into my planning — and in case of automation I would like to have that taken into account. So if my goal is a monthly rent with a buying power of today's 2000 Eur and have already collected 100 Euro (today — without inflation) through another source — it would be nice to have that calculated in :)
6. Adding insurance — this would be a great addition to the partners list. If I can make an insurance for my funds (it’s not like supposedly safe funds haven’t been stolen on the blockchain) that would add great value! — I would use it because pensions are supposed to be the safer part of my funds that a whole part of my life is based on.
1. Assets monitoring module : have the ability to check my saving assets in real-time to see their evolution
and be able to react on time and effectively when needed.
2. Assets conversions module : have the ability to convert my savings assets between different types(stocks/bonds/fiat/crypto) rapidly and easily
==> gain more flexibility/agility on managing my assets portfolio
3. Fiat/Crypto gateway module : have the ability to deposit/withdraw my saving assets instantly and easily in fiat or crypto money.
4. Assessment invest module : have the ability to assess different types of savings plans and choose to invest in the ones with the best ROI.
5. Risk management module : have the ability to assess the risk of different types of savings plans and be able to rank them using the risk severity.
Also have the ability to get alerts when the risk severity of my saving plans has raised above a threshold.
6. A family account : have the ability to create a group account for a family (husband, wife, children) where they can put their savings and also they can transfer assets between them easily and securely.
We thank everyone for these priceless information and views, and strive to consider every voice to bring you a better ecosystem where you can be sure your pension wouldn’t be screwed!