The Ultimate Game Changer: AI Chatbots and the Extraordinary Redesign of Retirement Plans

In an unusual yet innovative move, Newfront, a tech-centric insurance brokerage, and retirement advisory firm, hosted a hackathon earlier this year. The goal? To integrate artificial intelligence (AI) into their client-facing products and services. 

The outcome was an AI-powered workplace benefits chatbot currently being utilized by employers for answering general benefits inquiries, including those related to retirement plans.

Greg Kaplan, the leader of Newfront’s retirement services practice, explains, “We feed all the benefit guides, policy documents, and any information related to employee benefits and retirement plans into our AI engine. It’s designed to answer any questions, such as the company’s health plan or the 401(k) match.”

AI: From Theory to Practice

While AI is a buzzword in financial newsletters, its practical applications often must be discovered. However, at San Jose-based Newfront, AI’s practical implications are becoming tangible rapidly. Newfront’s VP of Engineering, Lin Yuan, demonstrated to the Congressional AI Caucus how their benefits bot answers questions about health savings account plans and flexible spending accounts.

AI for Auditors and Plan Sponsors

In San Jose, Kaplan’s retirement team is leveraging AI to serve plan sponsor clients. They employ a type of AI technology called a “large language model” to mine and analyze Form 5500 retirement plan filings. This helps identify trends and insights for client plan design.

“We benchmark to the extreme,” Kaplan says. “The more specific we can get to an individual client, the more relevant the analysis becomes. We like to go granular and industry-specific, to the plan size, the number of participants, the client’s peer group, and who they are competing with for talent.”

AI: A Game-Changer for HR Benefits

With his tech background from Microsoft Corp., Kaplan brings a tech-startup ethos to employee benefits. His interest in retirement plans stems from his experience in a company leadership team, where he spent significant time explaining benefit offerings to employees.

While creating its chatbot, the Newfront team discovered some of the AI’s source benefit guides needed clarification. This led to a “feedback loop” that helped create better materials and improved machine responses.

Newfront’s materials highlight that their chatbot can reduce the workload of human resource teams by up to four weeks, eliminating the need for answering emails or being stopped in the hallways for inquiries.

The Future of AI in Retirement Space

Kaplan believes that the application of AI technology in retirement is still in its early stages. However, he is confident that the upcoming round of Form 5500s will bring his team one step closer to practical use, providing deeper insights in less time and with fewer human work hours.