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Blockchain, the technology behind cryptocurrencies such as Bitcoin, is a form of distributed ledger technology designed to securely process and store digital transactions.
Further research into the method must produce a more flexible and transparent administration system with significantly lower costs, the APG and PGGM said in a joint statement.
The prototype involved the administration of a virtual defined benefit scheme with 10,000 participants, under arrangements similar to APG’s company pension scheme. A virtual employer then fed salary data and information regarding life events, such as a wedding and a divorce, into the system.
The providers said the next step would be to add elements such as an administration of benefits and contributions, and subsequently run the entire administration of the APG scheme on the blockchain in parallel to its current system.
APG and PGGM said their prototype was designed to lead to a new kind of pensions administration, providing access for the pension fund, its sponsor, participants and the supervisor.
The various players would have their own key to access and rework the data that are relevant to them.
Among the benefits of the blockchain is that data don’t have to be passed on and copied between players.
The blockchain technology is designed to be more efficient and to generate less errors than existing methods of pension scheme administration.