What The Pensions Regulator’s AI guidance means for trustees

The publication of The Pensions Regulator’s guidance on artificial intelligence is a welcome development for the pensions industry. AI has the potential to improve efficiency, support decision-making and enhance administrative processes across pension schemes. However, as with any emerging technology, its benefits can only be realised when accompanied by robust governance and effective oversight.

The guidance sends a clear message to trustees: while AI can support pension scheme operations, responsibility for decision-making cannot be delegated to technology. Trustees remain accountable for the governance, stewardship and outcomes of their schemes, regardless of the tools being used.

Unlocking the opportunities of AI

There is no doubt that AI presents significant opportunities for pension schemes and their advisers. From analysing large volumes of data and identifying trends, to streamlining administration and improving operational efficiency, AI has the potential to help schemes work smarter and respond more effectively to increasing regulatory and governance demands.

As schemes continue to explore how AI can support their activities, the focus should not be on whether the technology can be used, but on how it is used responsibly. Implementing AI successfully requires clear policies, appropriate controls and a framework that allows trustees to understand both the opportunities and the risks.

Accountability cannot be outsourced

Perhaps the most important theme within the guidance is accountability.

AI may assist with analysis and recommendations, but it cannot replace trustee judgement. Trustees remain responsible for the decisions they make and must be able to demonstrate appropriate oversight of any AI-enabled processes used by the scheme or its service providers.

This means understanding where AI is being used, why it is being used and how outputs are generated. Trustees should feel confident challenging recommendations, questioning assumptions and seeking clarification where necessary.

The increasing use of AI by third-party providers also raises important considerations. Trustees should ensure they understand how their advisers, administrators and other providers are incorporating AI into their services, along with the controls in place to manage associated risks. Effective governance requires transparency, not just confidence that technology is delivering the right result.

An overlooked challenge: how members are using AI

While much of the discussion around AI focuses on how schemes and providers use the technology, another important consideration is how members are using it.

Public AI tools are becoming an increasingly common source of information. For many people, asking an AI-powered chatbot a question may feel quicker and more accessible than navigating pensions literature or seeking professional guidance.

However, this creates potential risks. AI-generated responses can be inaccurate, incomplete or lacking the context of an individual’s specific circumstances. Members may struggle to distinguish between reliable information and content that sounds convincing but is ultimately incorrect.

The consequences for retirement planning could be significant. Decisions relating to contributions, retirement timing, benefit options or transfers are often complex and highly personal. Misunderstanding key information could have a lasting impact on member outcomes.

For trustees, this highlights the growing importance of member communications. Schemes should continue to focus on providing information that is clear, accessible and easy to engage with. Members need trusted sources of information that are available through the channels they already use, helping them make informed decisions with greater confidence.

Governance and member protection must go hand in hand

The pensions industry should embrace technologies that can improve efficiency and support better outcomes. AI has the potential to become a valuable tool for trustees and their advisers, but only when supported by strong governance and appropriate safeguards.

The Pensions Regulator’s guidance reinforces an important principle: innovation does not remove accountability. Trustees must continue to understand, oversee and challenge the tools that support scheme operations, while ensuring members remain protected in an increasingly digital environment.

As AI adoption grows, the schemes that benefit most are likely to be those that balance innovation with robust governance, effective risk management and a continued focus on member outcomes. Technology may evolve rapidly, but the trustee duty to act in members’ best interests remains unchanged.

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