Artificial intelligence is making its way into retirement plans, and plan fiduciaries can’t afford to sit on the sidelines. As recordkeepers and advisory firms roll out AI-driven tools, the time has come for plan sponsors to start asking questions and building governance processes around how those tools are being used.
A recent article by Judy Ward for NAPA Net explores the promises and risks of AI in the retirement plan space, and offers practical guidance for advisors helping sponsors navigate this new terrain. The piece draws on insights from retirement plan advisors, attorneys, and compliance experts who closely monitor AI developments.
The potential upside is significant. Jon Chambers, managing director of retirement plan consulting at SageView Advisory Group, sees AI as a way to help defined contribution plans deliver a more personalized, pension-like experience for participants—including guided paths to lifetime income and predictive analytics that help sponsors optimize plan design decisions. But he’s also clear-eyed about the risks. Plan advisors will need to help their sponsor clients understand the trade-offs of different AI tools, and that will require measuring risks and rewards in ways the industry hasn’t done before.
AI has already become the top priority for compliance officers at investment advisory firms, according to the 2025 Investment Management Compliance Testing Survey from the Investment Adviser Association, ACA Group, and Yuter Compliance Consulting. And as Leslie Ballantine, a retirement plan advisor at Shepherd Financial, put it, monitoring AI isn’t optional. Given the amount of personal participant data stored with providers and the significant portion of most people’s wealth tied up in their retirement accounts, now is the time to develop a governance process and make sure it’s being followed.
Fiduciaries’ oversight responsibilities here are similar to those that apply to cybersecurity: they need to ensure vendors are using AI tools responsibly and in participants’ best interests. Alan Hahn, a partner at law firm Davis & Gilbert, noted that while everyone is excited—and a little nervous—about AI, the challenge is figuring out what prudence means in a world that’s changing so fast.
The article lays out six areas where advisors can help sponsors get started. These include:
- Beginning due diligence now, even though it’s early in the trajectory
- Understanding what’s really motivating a recordkeeper to implement AI tools
- Getting knowledgeable about data-security risks and fraud vulnerabilities
- Learning about the risk of “hallucinations,” where AI produces false or misleading output
- Reviewing service agreements for liability protections if something goes wrong, and
- Being transparent with sponsors about how the advisory firm uses AI.
Robert Gibson, vice president at HUB International, summed up the current moment well: “We’re in the ‘garage band’ era of AI tools. Everybody has some kind of AI tool that they’ve spun up and that they can sell.”
But that doesn’t mean sponsors should wait to start asking questions. Even though it’s early and this sea change brings complexities, gaining visibility into recordkeepers’ AI deployment plans now is better than playing catch-up later—or worse, incurring fiduciary liability due to a lack of understanding of how these tools are being used.
