Financial Navigator Journal: Among the most innovative concepts being revived by fintech is the tontine.

Among the most innovative concepts being revived by fintech is the tontine. A tontine is a retirement investment pool shared among a group of subscribers.

As members of the pool pass away, their remaining assets are redistributed to the surviving members, rather than to their heirs. This system benefits the longer-lived participants at the expense of those who die earlier. The additional assets redistributed in this manner are known as “mortality credits.

Investments in tontines are typically irreversible. Tontines can provide lifetime income comparable to annuities and pensions. Notably, a tontine can never be underfunded because it makes no explicit financial promises or guarantees.

The benefits paid to participants adjust dynamically, based on the group’s mortality and financial market experience, ensuring that the present value of payouts never exceeds the present value of the pool's assets. Like a defined contribution plan, tontines carry no unfunded liabilities, as benefit payments are strictly based on the available assets. As such, tontine pools are insulated from investment risk, longevity risk, and underfunding risk (Fullmer, 2019: 4–5).

A case study highlights a Swedish regulated fintech trust company that provides monthly lifetime income. The firm uses blockchain technology with pseudonymous, immutable ledgers and biometric authentication to ensure transaction transparency while maintaining user privacy. Its authentication system leverages smartphone technology and 3Dfacial mapping to verify that a live individual, rather than a static image, is accessing the platform. The company offers its services to individuals, corporations, and governments, charging a 1% annual fee. (5)

In Europe, and specifically in Bulgaria, tontines can be legally offered also through life insurance companies, regulated by Directive 91/674/EEC, as well as by PEPP providers.

The PEPP legal framework allows for structures similar to tontines. For example, consumers without spouses or children might prefer to “leverage” their retirement investments by choosing a PEPP that follows the tontine principle. In doing so, they forego inheritance in exchange for the potential to increase their investment returns (Meerten, Hooghiemstra, 2017: 79).

Blockchain technology underpins many digital pension solutions. One notable application is in pension risk transfers. (6). Legal & General, the UK’s largest retail life insurer, is rolling out a blockchain-based platform for pension risk transfers via Legal & General Reinsurance. Although pension risk transfer is not common in Bulgaria’s pension model, a blockchain system could fundamentally reshape the organization of long-term life-insurance business.

Blockchain is uniquely suited to the annuities market’s long duration contracts: it enables data and transactions to be signed, recorded, and preserved securely and immutably over the lifetime of each agreement. By automating the entire reinsurance workflow -including pricing, claims management, financial reporting.

See case study of fintech company Tontine Trust, which offers products such as Tontine Pensions, Tontine Trust Funds, and the TontineIRA®, guaranteeing members a monthly income for life (Tontine Trust, 2025).