Despite declining annuity rates, Canadian capital accumulation plan members retiring at the end of September experienced some of the best outcomes in more than 13 years, according to a new report by Eckler Ltd.
The consultancy’s latest CAP income tracker found a typical male member retiring at the end of September 2024 achieved a gross income replacement ratio of 65.4 per cent, while a female member achieved 63.7 per cent.
Read: CAP member outcomes continue to increase in Q2 2024: report
It noted the findings align with the Canadian Association of Pension Supervisory Authorities’ updated CAP guideline, which, among other stated goals, aims to improve plan member outcomes.
In order to support member outcomes, the report encouraged plan sponsors to take several actions including documenting governance roles and performance criteria; developing clear communication strategies; conducting reviews of service providers; providing resources for retirement income navigation; and ensuring transparency about fees.
“The updated CAP guideline represents a significant step in enhancing the governance of Canadians’ retirement savings,” said the report. “With a focus on clarity and accountability, CAPSA has sought to improve the effectiveness of CAPs as retirement savings vehicles and empower members to take control of their financial futures.”
Read: How CAPSA’s updated CAP guideline will impact plan sponsors, members