Every retirement plan provider now talks about AI, personalization, and “smart” tools. Plan sponsors should listen — but they shouldn’t be dazzled.
Technology does not replace fiduciary responsibility. It magnifies it.
When a participant website nudges behavior, projects retirement income, or offers automated guidance, those features don’t exist in a vacuum. They are influencing participant decisions. That means sponsors need to understand what’s behind the curtain: the assumptions being used, the data sources, and whether any conflicts are embedded in the design.
Too often, technology is treated as a black box. The vendor built it. The recordkeeper maintains it. The sponsor just “offers” it. That mindset is dangerous. If a tool is part of how participants engage with the plan, it’s part of the plan’s fiduciary ecosystem — whether vendors want to admit it or not.
The right question isn’t “Is this innovative?” It’s “Is this prudent?”
Good technology supports fiduciary decision-making by simplifying choices, improving clarity, and encouraging better behavior. Bad technology creates false confidence and obscures responsibility. And when something goes wrong, “the system did it” has never been an effective fiduciary defense.
Plan sponsors don’t need to become software engineers. But they do need transparency, documentation, and explanations they can stand behind. If a provider can’t clearly explain how a tool works, why it’s appropriate, and how it helps participants make better decisions, that should be a red flag.
In the end, technology doesn’t protect fiduciaries. Thoughtful oversight does.
