Pensions UK aims to help trustees make responsible use of AI
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A new report by Pensions UK sets out how pension funds can make responsible use of artificial intelligence to improve outcomes for savers while managing the risks.
Savers are already using AI tools for financial information and to make decisions about retirement, while schemes are exploring AI for administration, investment, member engagement, fraud detection and data remediation, said Pensions UK.
However, the association’s new report, '2030 ready: a pathway to AI adoption in pensions’ also warns that schemes need to move quickly on AI, or risk the gap being filled by unregulated and potentially unsafe tools that could expose savers to inaccurate guidance, data misuse, scams and poor financial decisions.
The AI revolution is already impacting the pensions industry in multiple ways, said Zoe Alexander, executive director of policy and advocacy at Pensions UK, warning of the risks the technology poses along with providing opportunities.
“That is why trustees, schemes, government, regulators and the wider industry need to work together now. AI should be adopted in a way that is trusted, well governed and focused on better outcomes for savers,” she said.
Designed to support trustees, the new report highlights areas where AI could support the pensions sector – ranging from better member communications, more targeted support and reducing manual administration, to detecting fraud and scams, improving accessibility for vulnerable savers and unlocking data held in legacy systems.
It lists the risks that trustees and schemes will need to manage. As well as AI-generated outputs, cyber security and data privacy, there could be issues with intellectual property, labour market disruption and environmental impacts from AI’s energy use.
Pensions UK is calling on the industry to adopt AI with clear human oversight, strong accountability and robust governance, and urges government and employers to monitor the impact of AI on workers – particularly older workers and underpensioned groups who may be more exposed to job displacement or changes in working patterns.
Pensions UK is working with the Pensions Regulator’s Pensions Data and Digital Industry Working Group to develop and provide access to a dynamic AI guidance tool giving pensions-specific guidance to support day-to-day decisions.
