Blockchain technology has once again found a new application, this time for the government for pension tracking and management.
The Russian State Pension Fund in Russia announced on Aug.29 that it now plans to use blockchain technology to record and monitor details of citizens’ pension including employer information.
A Single Platform
One of the reasons for the setting up of this platform is first to reduce cost. According to the statement made by the Russian State Pension Fund, the new platform will help to reduce the costs associated with recording and taking the information.
It will also help to streamline all pension management processes to a single platform to allow uniformity and ease of use. All Russian State Pension Fund systems will be uploaded unto the blockchain-powered system when it launches.
Proposals for the platform are expected to be presented by the end of the year.
The adoption of this new platform also marks a significant change in the way employers and employees will set up working arrangements.
The use of digital contracts is to be set up to allow for easier use of the system.
These contracts are created and stored digitally and agreements are made by way of a digital signature to be appended by both parties.
There is also the requirement for citizens to apply through the MFC or other certifying units before the process can be complete.
The Russian State Pension Fund will also use this technology to access all the records it collects including tax, insurance, and others. This information will be stored on the system and the Russian State Pension Fund will have the power to make adjustments to them seamlessly.
This new platform also marks the departure from the use of paper forms and documents by the government to digital ones.
However, this change will not be made overnight. According to the chairman of the government Dmitry Medvedev, the transition to digital record keeping will not take place until 2020.
According to the statement made, “The introduction of smart contracts into labor relations will allow in the future to refuse compulsory conclusion of them in paper form, but to have information about them at any time, as it happens today with the right to real estate.”
This new platform also aims to protect employees. Since the contracts will be stored on a digital platform, it will be difficult for employers to draft contracts that are against government regulations.
This, in turn, helps to curb the exploitation of employees by employers.