Sackers welcomes TPR guidance on AI in pensions

The Pensions Regulator (TPR) has published new guidance aimed at encouraging pension scheme trustees to explore the use of Artificial Intelligence (AI) to "deliver better member outcomes" while safeguarding against potential risks. Sacker & Partners LLP, a preeminent UK law firm specialising in pensions and retirement savings, has warmly welcomed this initiative.

Commenting on the guidance, Oliver Topping, partner at Sackers, stated, “Against the backdrop of AI use becoming increasingly commonplace in the pensions industry, this guidance is most welcome. AI is a powerful tool which can help improve and deliver any number of efficiencies but, as TPR clearly acknowledges, this comes hand-in-hand with certain risks, two obvious candidates being hallucinations and cyber threats. There are also hidden dangers for members in using freely available AI to help plan for their retirement.”

The guidance outlines seven principal tenets designed to aid trustees and scheme managers in navigating their AI strategies. Topping emphasised that while many functions may be delegated, there is no expectation for trustees and scheme managers to become AI experts. However, he noted, depending on their AI usage and that of their advisers, developing an AI policy may be necessary to set clear expectations.

“In what is an ever-evolving and rapidly growing area, the guidance provides a sensible and pragmatic framework,” Topping concluded. “Trustees and scheme managers should take the time to discuss the guidance with relevant advisers, assess existing and possible future AI use, before deciding on what steps might be needed next.”

As the pension sector increasingly integrates AI technologies, the importance of this guidance cannot be overstated. Trustees are reminded that existing duties and responsibilities remain unchanged, ensuring a focus on member interests through ethical and responsible governance. TPR's guidance seeks to empower trustees by providing essential frameworks to manage risks while exploring innovative solutions to enhance member services.