Russia’s Pension Fund to Use Blockchain for Employment Contracts

Russia’s State Pension Fund is considering the use of blockchain technology to integrate all of its information into a distributed registry and will prepare proposals to integrate all systems into a single platform, CoinTelegraph reports. The fund believes it will cut costs for servicing and storing significant amounts of data.

According to the Pension Fund, the technology will also provide more transparency to labor relations agreements and help protect workers from having their rights violated by negligent employers, which experts have cited as a pervasive problem.

Alexander Shcherbakov, a professor at the Institute for Public Administration and Management’s Department of Labor and Social Policy, said labor violations are widespread among small- and medium-sized enterprises in Russia. New technology will enable such situations to be monitored.

“Employers often violate employee rights as soon as employees apply for a job, through to when they are dismissed,” Shcherbakov said.

State Labour Inspectorate statistics cited by Russian newspaper Izvestya show that more than 465,000 Russian citizens claimed their labor rights were violated in 2017.  In that regard, officials imposed fines for more than 20 billion rubles (approximately $293 million).

The Pension Fund’s decision to turn to blockchain comes against the backdrop of a radical pension reform the Russian government introduced in mid-2018. Officials initially offered to raise the minimum retirement age for women up to 63 years (from its current 55 years) by 2034 and for men up to 65 years (from its current 60 years) by 2028.