The $21 Trillion Pension Fund Market is Pouring Money into the Blockchain – #icobusted analysis


We’re starting a new column with this article – #icobusted. The author of the column is Alexander Savinkin, our investment expert and co-founder of Howtotoken. It’s here where we’ll scan the market for the newest and most remarkable upcoming ICOs and analyze them in-depth, and our focus will be on the viability of the business concepts behind these projects. This won’t concern pre-ICO/ICO price gaps, no gasps and groans about the team, and no code checking. Here, we will try to break everything down to see if there are any market prospects for the product if, and only if, that product can be delivered.

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One of the most interesting upcoming ICOs that is about to pop up is called Akropolis. In a few words, Akropolis aims to be the first pension fund marketplace. It is one of the few projects that is going to leverage the blockchain within the traditional sectors of economy. And that particular sector happens to be pretty darn big.


The core idea is to build a platform that unites separate pension funds into one marketplace where individuals can compare and choose the most appropriate pension fund and plan (from the wide variety that’s out there), and fund managers will be able to use the platform for customer acquisition. Data trustworthiness and data ownership will be supported via smart contracts.

pension fund marketplace

I won’t say that it’s impossible to make such a service without the blockchain; but the blockchain can provide the advantages of truthfulness as a public control mechanism, mostly because of the distributed ledger for the history of interactions and a fund’s performance/reputation. Also, DAO can be utilized to reduce fractions between pension funds and fund managers, for example. It’s also a great way to experiment and see how the things work out in practiсe while having a centralized backup.  

Akropolis has decided to begin with a semi-decentralized solution, because the blockchain is not a necessary element in this case, especially in the beginning. But as we have all seen, the retirement fund market is very unstructured and difficult to properly analyze. In this way, the blockchain architecture of data storage might be one of the ways of bringing order into this chaotic market.

Also, this might bolster smart-contract usage on the neutral territory of Akropolis’ platform, which by itself might turn this into a more customer-oriented market. And sure, blockchain implementation into Akropolis’ platform is also a good reason to have an ICO.

These days, the typical way of choosing a pension fund is to consult with your bank manager, insurance agent, or financial consultant. And most of these intermediaries will just send you off to their partners. Meaning your choices will be severely limited and biased, since these “partners” usually pay out a finders fee.

Yes, there are a lot of surveys and calculators on how to manage your pension savings. There are a range of projects out there that try to help you make a choice. There are also some fund-rating sites in the UK and the US. Still, with the lack of uniformity that this market is facing, customers come along with a lack of data and extended expenses.

But there is no such marketplace yet where you can compare all the choices by different characteristics, buy them directly on the site, or even make your own personal order for a pension program and set an auction for the funds you’re interested in.

So if anyone can provide an unbiased and easy-to-understand tool to select the most suitable and reliable pension fund, then it’s a big opportunity to hit the jackpot.


Akropolis’ potential market is really, really big.

In 2017, US pension assets reached $25,400 billion with a 12.7% annual growth rate, and it is about half of the total global volume of pension assets.

By the way, all that happened at a time when the average level of unfunded government pension liabilities analyzed in 20 OECD countries was ~190% of the GDP, dwarfing the reported amount of all government debt, which totals only at 109% of the GDP (due to CityGroup report cited in Akropolis’ white paper)!

The central idea for the market is this: the ageing population in developed countries is a steady process that coincides with worsening state finances. Everyone has to earn his or her pension mostly for themselves.

pension fund

Akropolis can pretend to fund marketing budgets for customer acquisition. To assess the size of potential stake let’s take mutual funds for instance, which are the main client hunters in the market. Active mutual funds in the U.S. have managed a total of $11.6 trillion in 2016. This industry’s revenue is in the order of $100 billion, with over one third of this amount representing expenditures in marketing, which largely consists of sales loads and broker commissions (known as 12b-1 fees).

So if Akropolis becomes a customer’s point of entry to pension funds, then it could have a potential market in the volume of at least $30 billion per year.


As a matter of fact, there is not much innovation in the traditional pension fund industry. And any project promising a real step forward for both the customers and service providers can expect a good market response.

We can take the Blooom project as an example, which provides an investment advisory application designed for the management of employees’ 401k accounts (for $10 per month with an estimated average of $5,000 in annual savings). Blooom collects basic user data like name, email, age, and timeframe to retirement and provides free allocation and fee analysis. For a monthly fee, clients can sign up to have their accounts managed by Blooom.

In less than three years, Blooom had reached $2 billion in assets under management by January 2018. Round A (October 2015) was at $4 million and then Blooom landed  $9 million for Round B (January 2017). Blooom revenue is not available, but by multiplying the 16,000 clients declared on the site by the $120 annual fee we get a figure that it’s about $2 million. Assuming that 90 million Americans, on their own, are bungling their most valuable retirement asset – the 401K – only 1% of the market is needed to boost Blooom revenue beyond $100 million. It looks like quite a unicorn, guys!


Akropolis doesn’t seem to have a high risk of development failure, and they could very well deliver on all of their promises. The $25 million hardcap also looks reasonable for such an endeavour. But the problem here is that, according to Akropolis’ draft of materials, $12.5 million in technology and talent expenses seems like a lot, and the $2.5 million for marketing also raises questions. Is it really enough money for a nationwide B2C (business-to-customer) marketing campaign, let alone for global marketing? It may come to pass that extra funding will be required before the project starts to earn enough by itself.


And it is my own personal belief that having a security token is a must. Whatever is embedded in a utility token, nothing else will secure investor`s future profits with 100% guarantee. This is not a cryptocurrency to cash in on during a stock-price uprise.

And final pro et contra:

(+) Huge and rising national market, and global as well
(+) Lack of direct and strong competitors in the marketplace
(+) Product is not so hard to deliver
(-) Unthought-out budget (at least in the draft version)
(-) Token is not a security one, although dividend payouts suggest otherwise

All in all, Akropolis deserves a more detailed consideration from investors.

You can read now only a draft of the WP. And folks, please, make your WP beta-version more human-readable!


Useful materials

  1. Why people are abandoning their 401(k)s by Marketplace Weekend Staff
  2. Global pension assets study 2018 by Thinking Ahead Institute
  3. Pension Research Reports by Society of Actuaries (SOA)
  4. 2018 Corporate Pension Funding Study by Milliman
  5. Building a better retirement income solution by Ernst & Young (EY)
  6. New Jersey issues RFI for investment options for private-sector retirement marketplace by Robert Steyer
  7. New Jersey Small Business Retirement Marketplace by State of New Jersey
  8. New Retirement Plan Marketplace Makes It Easier for Americans to Save by John Mangan
  9. Research & commentary by Vanguard
  10. Best Retirement Plans: Choose the Right Plan for You by Dayana Yochim
  11. Marketing Mutual Funds by Nikolai Roussanov, Hongxun Ruan, and Yanhao Wei
  12. Washington State Launches Online Retirement Marketplace by Melanie Waddell
  13. A New Frontier for Saving for Retirement? The Creation of State Retirement Savings Marketplaces by Rockefeller Institute of Government

All materials on this site are for informational purposes only. None of the material should be interpreted as investment advice.