Retirement board adopts AI use policy for staff and vendors, requires disclosure for substantive outputs

The Mendocino County Board of Retirement on June 16 adopted an acceptable‑use policy governing staff and vendor use of artificial intelligence tools, requiring disclosure when AI materially contributes to reports or decisions and directing staff to develop related training and vendor contract terms.

Executive Director Doris Wrenchler told trustees the policy "is to establish basic guidelines for staff use of artificial intelligence tools" and to set minimum vendor requirements about data privacy and security. The policy requires authorized personnel to review AI‑generated outputs used to inform consequential decisions affecting members, staff or trustees, and asks staff to report policy changes annually or sooner as technology evolves.

Board counsel and trustees debated language to ensure meaningful disclosure. Counsel recommended clearer written disclosures and removal of ambiguous qualifiers; trustees asked staff to add trustees to the clause describing who may be affected by consequential decisions. The board approved the policy with a small edit to add trustees to that clause and directed staff to return with refined wording and a training schedule.

The policy will be enforced through contract exhibits for vendors and consultants that use AI in services provided to the retirement system; staff said vendor agreements already include a related exhibit addressing data privacy, security events and AI use. Trustees emphasized the expectation that member data not be exposed to third‑party AI tools and that staff training on prompts and verification will be developed.

The board instructed staff to circulate the revised language and to schedule training and an implementation timeline. Trustees also agreed to revisit the policy periodically as the technology and regulatory best practices evolve.