Trustees and pension managers are being warned about the potential risks of using AI to simplify scheme administration.
The Pensions Administration Standards Association (PASA) has issued new guidance, which offers practical support on how this new technology can be used in a range of tasks, from chatbots and predictive analytics to fraud detection and intelligent document processing.
However this PASA guidance urges caution, and warns trustees and administrators to ensure this AI is using robust and high quality data. PASA says there is need for clear risk management considerations when it comes to using this new technology.
PASA chair David Fairs says: “AI is already transforming the way administration operates and interacts with members, but it brings real challenges in data governance, ethics and transparency. This guidance helps schemes and administrators navigate this balance, embracing innovation while ensuring data quality, trust and robust oversight remain paramount. As AI becomes more integrated into pensions administration, PASA will continue to champion responsible adoption to protect savers and support industry progress.”
Kristy Cotton, Chair of the PASA Data Working Group, commented: “AI has huge potential to enhance efficiency and member experience, but its value depends entirely on the quality and integrity of the data behind it. Our Guidance sets out practical steps to help organisations assess their data readiness, understand the risks and build appropriate governance frameworks. It’s about being curious, with caution, and ensuring AI works for the benefit of savers and the industry as a whole.”
The publication supports the direction outlined by The Pensions Regulator’s Digital, Data and Technology (DDaT) Strategy and the FCA’s AI Update, both of which emphasise responsible innovation and robust data management. It encourages trustees and administrators to take proactive steps to understand how AI is being used and to keep data quality at the top of their agenda.
This PASA guidance: ‘Use of AI in Pensions Administration – Embrace the Opportunity with Caution’ is available here.