What trustees should ask before a fund touches AI

Trustees are being pitched AI from three directions at once: the administrator, the consultant, and the vendors of both. The pitch is usually about hours saved on remittances, claims review and participant questions, and the savings are often real. The fiduciary question is different: can the board show it exercised care in deciding, and can it show the same care in oversight afterward?

Six questions for the minutes

One. What data does this touch, and does any of it name a participant? If it does, where is it processed and who can see it? Two. Does it inform a decision about a person: eligibility, a claim, a benefit amount, an appeal? If yes, who reviews, and how is that review recorded? Three. What does the vendor contract say about training, retention, subprocessors and exit? Has counsel read it? Four. What will a participant be told, and what will they be told when the answer is no? Five. What does it cost over three years, including the part that scales with use, and what happens if we stop? Six. Who on staff owns it, and who reports to the board on it, and how often?

Why the record matters more than the model

Fiduciary duty is a duty of process. A board that asked the six questions, recorded the answers, set an oversight cadence and revisited the decision is in a strong position even if the technology later disappoints. A board that approved a vendor because the demo was impressive is not, however well the tool performs. The document is the protection.

Health plans

For a health and welfare fund, add HIPAA to the list. If the tool touches protected health information, the vendor is a business associate and has to sign as one. Meeting-notes bots, claims-summary tools and participant chat assistants are where we most often find PHI moving without anyone having asked.

A resolution you can adopt

Most boards we work with adopt a short AI resolution: any AI use touching participant data or participant decisions requires the six questions answered in writing, counsel's review of the contract, a named owner, and a report to the board at least annually. It is a page. It changes the conversation with every vendor that follows.