APG and PGGM, the two largest pension fund managers in Netherlands, announced the success of a pilot test that focuses on developing a blockchain app to facilitate pension administration. The final goal is to apply this prototype to the pension administration system and make it cost-efficient, transparent, and flexible.
However, the two pension administration companies didn’t indicate a precise deadline for the trials and didn’t explain how much the prototype would help save.
The announcement, published on APG’s official website, says that blockchain technology could enhance the pension funds’ servicing. The primary goal is to cut the costs of the participants, optimize pension administration, and add more security. On top of that, participants will be able to easily access the personal pension data.
The prototype represents a pension administration system managed with the help of smart contracts and is shared by all participants.
Wim Henk Steenpoorte, a member of the APG Executive Board responsible for Pension Fund, commented on the joint experiment:
“We aim to create the maximum possible value for pension funds and their participants. By investing in smart applications, such as blockchain, we make our pension administration simpler and cheaper over time. This is good news for pension funds and their participants. We are pleased to be able to facilitate this development and partnership at the Smart Services Campus in Heerlen.”
On the other side, Paul Boomkamp, Executive Board member at PGGM, also showed much optimism about future results:
“With this experiment, we are building the pension infrastructure of tomorrow for our clients and their participants. It is an important step that we are able to take with the support of our largest client, PFZW. The first results make us excited and curious to learn and explore even more.
Ultimately, this experiment has to show that blockchain technology has the potential to manage a policy administration at lower rates. It is an excellent development that two of the largest pension administration organizations are joining forces to work on this kind of innovation.”
With the help of blockchain technology, the pension data will be stored in the network’s nodes, where each node can represent pension providers, regulators, and employers. In this way, the programs will be synchronized and executed much faster, while the info will be easily accessible.
APG has over 456 billion Euros under management, mostly in pension assets for Dutch government workers. PGGM manages the equivalent of 205.8 billion Euros, and Dutch healthcare workers account for the largest share in company’s client base.
Blockchain-powered solutions are becoming increasingly common in the financial industry, and we also reported an announcement by JPMorgan today, in regards to a blockchain payments network that will facilitate international money transfers and reduce delays.