APG and PGGM develop a blockchain application for pension administration

Published on: 12 October 2017

APG and PGGM have successfully completed the first phase of a joint experiment involving the development of a pension administration blockchain application. The two pension administration organizations will now be conducting further research with this prototype. Over time, the continued development of this prototype will produce a more flexible and transparent pension administration system at considerably lower costs.


Wim Henk Steenpoorte, member of the APG’s Executive Board: "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."


Paul Boomkamp, member of PGGM's Executive Board: "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."


Pension Administration Blockchain Application

The expectation is that blockchain technology has the potential for significantly improving the services pension funds provide to their participants. A key objective is to lower participant costs and to simplify pension administration, and make it more secure. In addition, the personal pension data will be become more accessible to participants.


The developed prototype is comparable to a pension administration system shared by all parties. This is controlled by means of so-called smart contracts. This is a set of a programmable rules that specify who can view, change, and use the data.

The use of blockchain technology makes it possible to store pension information in the nodes of the blockchain network. These nodes are points in the network and consist of, for example, pension providers, employers, and regulators. The nodes check the information, execute the programmed pension contracts, and synchronize with each other. This makes the storage of pension information secure and participants—at the push of a button—can see how much pension they have accrued.


Next Phase

The first results are very promising and at the same time, there is still much to learn about blockchain and the opportunities for pensions. In the coming period PGGM and APG therefore will continue the blockchain project. For this experiment are talks are held with various parties in the pension chain such as pension funds, regulators and information providers.

Together with PPF APG, the company pension fund of APG, a test case is developed in which the administration of the fund is implemented in blockchain. This fits the strategy of the fund for an efficient pension implementation.