Three-quarters of UK defined benefit (DB) pension schemes report some use of artificial intelligence (AI) by trustees, despite gaps in training, governance and oversight of advisers and service providers, according to a survey by Aon.
The survey covered 61 UK DB schemes, ranging in size from fewer than 1,000 members to more than 20,000, and examined AI adoption across governance and trustee duties, as well as schemes’ awareness of its use by advisers and suppliers.
Although 76% of respondents reported some use of AI by trustees, none had a documented roadmap balancing its benefits, risks and controls. More than half (53%) reported that trustees had received no AI training.
Meanwhile, 73% did not carry out specific assessments of providers’ AI governance, while 94% had no AI-specific requirements in their contracts with providers.
Of the respondents reporting trustee use of AI, 65% had discussed potential opportunities, but only 18% had formally recorded them. Some 61% said they did not know how their advisers used AI.
The findings come as AI rises up the strategic agenda for institutional investors globally. A separate study by the Thinking Ahead Institute, conducted in partnership with MSCI Institute and based on research with 20 global asset owners responsible for more than $5trn in combined assets, found that 67% of participants cited AI as a top strategic priority.
However, only 25% had made AI a standing board or investment committee agenda item, while three-quarters cited data quality and standardisation as a leading constraint on adoption.
Paul McGlone, partner at Aon, said the survey “makes it clear” that pension schemes are already working with AI, whether through trustees, advisers or wider member behaviour.
He continued: “But it’s also apparent that AI’s use is relatively ad hoc and wider knowledge of its usage is limited. While trustees are already making use of it for their own purposes, there would appear to be questions over how much understanding and visibility they have of its use by the advisers and suppliers they work with and who provide services to their scheme.”
McGlone said The Pensions Regulator (TPR) was due to issue guidance on the use of AI “very soon”.
He said: “I’m sure that this will provide a constructive framework for schemes to follow. The priority should not be to stop useful innovation, but to make it visible, controlled and accountable.
“Trustees should start with the basics – they need to understand where AI touches the scheme, that their data is protected, that they have challenged providers on their usage and also made sure that it’s still a human who is responsible for decisions and member outcomes.”
