Three-quarters (76 per cent) of Canadian capital accumulation plan sponsors say employees’ financial resilience and retirement readiness are the main reasons they’re modernizing their plan, up from 41 per cent in 2020, according to a new survey by WTW.
The survey, which polled more than 150 Canadian employers, found two-thirds (64 per cent) are also prioritizing talent attraction and retention, followed by flexibility to accommodate unique employee circumstances (43 per cent), diversity, equity and inclusion goals (29 per cent), operational efficiency (24 per cent) and workforce management (20 per cent).
To better understand the effectiveness of their plans, 28 per cent of plan sponsors said they’re currently utilizing data analytics to measure retirement outcomes, focusing on key metrics such as participation rates and contribution levels. This trend is expected to expand, as an additional 25 per cent of plan sponsors said they plan to implement similar measures in the next two years.
Read: CAP members’ 2024 outcomes highest since start of pandemic: report
In response to the evolving needs of their workforce, CAP sponsors are exploring innovative features to modernize their plans. While only 14 per cent said they currently offer automatic enrolment and decumulation solutions, more than a third (35 per cent) said they’re considering these options in the near future.
Nine in 10 (88 per cent) plan sponsors said they’re increasingly focusing on target-date funds as their default option to optimize their investment lineup. However, only 11 per cent said they’ve revisited the underlying investment principles that guided their initial TDF selection.
The survey also noted more than half of plan sponsors have recently reviewed their record keepers and among these respondents, seven in 10 (71 per cent) said they achieved improvements, primarily in the form of reduced fees.