Trustees and pension scheme managers must stay on top of how artificial intelligence (AI) technologies are being used throughout their supply chains, the Pensions Regulator (TPR) has said.
In new guidance, published today (20 May), the regulator set out its expectations around good governance relating to the use of AI by service providers. It urged trustees and managers to ensure that new technologies were used safely and in members’ interests.
Nausicaa Delfas, TPR’s chief executive, said: “AI has the potential to transform pensions for the better: improving how schemes are run, how members are supported, and how the system as a whole delivers value.
“But trust is the most valuable asset in our system, and that trust depends on the safe and responsible adoption of AI in members’ interests.
“Our message to trustees, administrators and scheme managers is clear: act now. Put strong governance in place, invest in data quality, understand where and how AI is being used in your scheme, and protect your members from AI-driven fraud.”
Data quality was of “critical” importance, TPR said in its AI plan, as this would dictate the accuracy of outputs from any automated processes. It was also crucial that schemes keep on top of data protection requirements as the use of AI evolves.
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What the regulator wants, and what it will do
The regulator said trustees and scheme managers should “establish clear governance and accountability for the use of AI systems and technologies”, including by suppliers such as administrators and advisers.
They should also “identify and evaluate risks, make sure appropriate controls are in place, review these regularly and adapt as necessary”, TPR stated, while keeping their own skillsets up to date on AI and technology issues.
“Strong governance, high‑quality data and robust controls will be essential to maintaining trust as schemes embrace new technologies.”
Helen Forrest Hall, Pensions Management Institute
Fraud awareness was another key concern, with TPR warning that schemes should seek to protect members from AI-driven fraud and scams wherever possible.
For its part, the regulator said it would publish further guidance on AI usage later this year, while working with the Financial Conduct Authority to ensure regulatory alignment on the issue.
At the same time, TPR highlighted that it was using AI technology itself to support its regulatory work. This included the use of an “AI-enabled process” to help identify pension scam websites. This has led to the removal of 29 “high-risk” sites while reducing the amount of time TPR staff spend reviewing sites.
Helen Forrest Hall, chief strategy officer at the Pensions Management Institute, said: “It is inevitable that AI will become an integral part of how pensions are run, from administration to member engagement. We therefore welcome TPR’s clear and timely focus on responsible adoption.
“AI brings real opportunities to improve outcomes, but it also introduces new risks. Strong governance, high‑quality data and robust controls will be essential to maintaining trust as schemes embrace new technologies.”
The institute is developing AI-related training tools to support industry professionals in understanding and using the technology, Forrest Hall said.
