Members prefer human interaction over AI in pensions

A survey conducted by Local Pensions Partnership Administration (LPPA) in collaboration with Burges Salmon has revealed that pension members are hesitant about fully embracing artificial intelligence (AI) when making critical retirement decisions. The survey, which gathered opinions from 1,690 pension members, highlighted a significant scepticism regarding the accuracy and reliability of AI-generated information. While 30% of respondents reported using tools like ChatGPT, Copilot and Gemini on a weekly basis, a troubling 53% expressed doubt about the correctness of data provided by AI.

AI usage specifically for pensions research remains low, with only 9% of members employing these tools for topics related to retirement planning and pension benefits. The findings suggest that while members are open to utilising AI as an information source, they unequivocally prefer human oversight. An overwhelming 61% indicated discomfort with the idea of AI making pension-related decisions without any human intervention, while merely 2% felt at ease with such a scenario.

When addressing the issue of human oversight, 69% stated they could be comfortable with AI playing a supportive role in decision-making if a human remained accountable. The survey underlines significant concerns about the potential risks involved with AI, particularly regarding lack of human oversight, with 76% of members voicing unease on this front. Other major apprehensions included data privacy (69%), information accuracy (69%), and the need for trust and transparency (58%). Members emphasised that such important decisions should not rest solely on technological solutions.

The survey also shed light on a notable knowledge gap related to the processing of personal information by AI tools, as 39% of respondents were unaware that such tools often store personal data indefinitely. Additionally, half of the members indicated they might leverage AI to initiate a complaint or an Internal Dispute Resolution Process (IDRP), while 64% said they would not disclose AI usage in the complaint documentation.

These figures underscore the potential complications surrounding AI-generated complaints, which could increase the complexity and volume of grievances faced by pension schemes. Furthermore, an overwhelming 76% of members expressed a desire for clearer guidance from administrators regarding the implications of using AI in financial and retirement decisions. A remarkable 81% also welcomed general insight into the responsible usage of AI.

Martin Davidson, chief technology officer at LPPA, noted that while members see the potential benefits of AI, they demand confidence and security in its application. He remarked, "AI has quickly become part of our everyday lives, and these results show that while members are interested in the opportunities it offers, they're clear that confidence, security and access to trusted information remains essential."

Chris Brown, a partner at Burges Salmon, highlighted the urgency for pension providers to enhance their understanding of the technology, stating, “With members now using AI on a daily basis and The Pensions Regulator’s guidance on the topic expected soon, now is the time to get up to speed with the opportunities and risks of the technology and to ensure that appropriate governance arrangements are in place.”

Gary Delderfield, another partner at Burges Salmon, echoed the sentiment, saying, “This survey shines light on how members are using AI and what their expectations of pension providers are, particularly in the LGPS space.” He further emphasised the responsibility of administering authorities to safeguard their members against AI-related risks.

In conclusion, the findings from LPPA and Burges Salmon reveal a fundamental need for a collaborative approach where AI assists but does not replace human expertise in pension-related decision-making. Both organisations are keen to assist pension schemes and Local Government Pension Scheme (LGPS) funds in establishing effective governance frameworks for the use of AI. For a detailed analysis of the survey results, a joint report is available, along with Burges Salmon's “Pensions AI Tool” designed to aid organisations in navigating AI governance.