AI in pensions
Partner Beth Brown was recently invited to join a roundtable discussion on the use of artificial intelligence in delivering pensions, hosted by Corporate Adviser.
The ‘AI revolution’ has sparked debate about safety and regulation across many industries, and pensions is no different. With the increasing use of AI chatbots and guidance tools to deliver more personalised support to pension scheme members, many in the industry have called for a proper regulatory framework to ensure that members’ savings are not endangered by this new and ever evolving technology.
The roundtable panelists were given the opportunity to test a chatbot prototype developed by Mercer, giving them hands-on insight into what the future may bring in terms of member support.
Beth discussed the distinction between advice and guidance, noting that factual information does not constitute advice in and of itself. She highlighted that the Mercer prototype currently only provides factual information answering user questions. However, she cautioned that as the AI tools improve, increased personalisation could create a grey area not yet defined in the existing regulation. Members must be informed that the AI tool they are using is only providing information or guidance, and not advice, she continued.
While AI tools may come with their benefits, Beth noted that they cannot replace trustees due to the fiduciary duties trustees owe to their schemes to ensure that members’ interests are protected. There are many decisions that need to be made in the day-to-day running of schemes that can only be made through human discretion, such as deciding what happens to a member’s assets if they die without nominating a beneficiary.
In terms of member experience, however, Beth commented “I think trustees will be open to utilising AI tools, but it’s about building trust in them. You need that buy-in for people to spend the time and resources using these tools. This will actually create the input which leads to getting a better output.”
The AI in pensions roundtable was held on 18 June 2024.
Read more about the AI in pensions roundtable in Corporate Adviser, here, and in their roundtable supplement here.
The views in this article are intended for general information purposes only and should not be used as a substitute for professional advice. Arc Pensions Law and the author(s) are not responsible for any direct or indirect result arising from any reliance placed on content, including any loss, and exclude liability to the full extent. Always seek appropriate legal advice from a suitably qualified lawyer before taking, or avoiding taking, any action. If you have any questions on the points raised in the above, please do not hesitate to get in touch.