Tontines Meet Blockchain: Something Old Could Be New Again

There’s a new possibility for funding pension plans, and it uses an old recipe, tontines, but with a twist.

Tontine is a financial product that combines features of an annuity and a lottery. Named after Lorenzo de Tonti, a 17th century Italian banker, Tontine allows people to share investments and divide up the money based on survival—as participants pass away, their share is redistributed to the surviving members. While it might be new to most investors today, it’s an old concept with a long history and was once popular in the U.S.

With many defined benefit pension plans being underfunded, ...