Artificial intelligence (AI) could help improve how employers communicate and engage with defined contribution (DC) scheme members, according to new research from WTW.
The consultancy giant’s latest UK DC Pensions and Savings Survey found that 80% of employers believe AI will “fundamentally change” communications and engagement around pensions and retirement.
WTW surveyed 229 employers and found that almost half (48%) plan to specifically explore how different pension providers use AI over the next two years. A further 11% have already begun to do this.
In addition, 46% of employers plan to introduce AI-related terms and conditions into future contracts with providers, while 7% have already done so.
From an employee perspective, WTW reported that more than half (51%) would be comfortable engaging with an AI-powered service for basic retirement questions. A similar proportion (47%) were open to AI-generated guidance tailored to their circumstances.
A lower proportion (38%) were happy to have an AI-powered service making decisions on their behalf.
Robert Callard, a senior director in WTW’s financial planning business, said: “The biggest challenge facing DC pensions is helping members make informed decisions throughout their savings journey and into retirement. AI has the potential to make support more accessible, more personalised and available when people need it most.
“Employees are broadly open to AI when it comes to receiving information and guidance. That creates an opportunity for employers and providers to rethink how they engage members. The key will be combining valuable human interactions with new technology, strong governance and human oversight so that trust is maintained.”
Contrasting views and warnings over AI
Other research has painted contrasting pictures of the effects of technology and AI on pensions and retirement. Earlier this week, separate research from Aptia showed that older pension scheme members were growing increasingly reliant on digital services such as their provider’s website.
Earlier this year, PensionBee cited data from search marketing platform Semrush, which suggested that traffic to the MoneyHelper website had fallen by 10% over six months. Over the same period, it reported a steady rise in Google’s “AI Overviews” generated from MoneyHelper’s content, indicating that savers are getting answers directly from search results rather than clicking through to source material.
Meanwhile, communications consultancy Quietroom has warned that many AI responses about specific pension schemes are misleading and often sourced from the websites of unrelated schemes.
Technology company Penfold has urged pension schemes to identify how their providers use AI and ensure they have clear accountability for how the technology is governed and how member data is handled.
The Pensions Regulator has also set up an advisory council to oversee how AI is affecting the pensions sector, while the Financial Conduct Authority is also working on regulation of AI use across the wider financial services industry.
