Ninety-seven percent of DC plan sponsors and 90% of RRSP sponsors say their plans are meeting their original capital accumulation plan (CAP) objectives, reveals the 2014 CAP Benchmark Report.
Sponsored by Great-West Life and managed by Rogers Publishing, Benefits Canada’s parent company, the report highlights results of an annual survey designed to provide plan sponsors with actionable benchmarks and opportunities for progress, improvement and growth.
“The report shows plan sponsors understand the four characteristics of successful CAPs,” says Jeff Aarssen, senior vice-president, group retirement services, for Great-West Life. “Successful plans encourage early enrollment, promote meaningful contributions, lessen the impact of withdrawals and provide appropriate investment choices.”
Participation rates among eligible employees for DC plans rose to 94% from 91% in the previous year, but declined for group RRSPs to 53% from 65%.
Group RRSPs are much more likely to be voluntary, and voluntary plans have significantly lower participation rates than mandatory plans. However, many organizations with voluntary plans use a variety of tactics to promote participation.
“We encourage plan sponsors to continue their successful efforts to educate members so they’re motivated to participate in a group retirement and savings plan,” says Ken Millard, vice-president, national accounts, for Great-West Life. “Tactics such as education sessions, one-on-one meetings and providing reading material in print and online are all working, and should indeed continue. The more ways we present information to members, the more likely we are to make an impact on their decisions.”
More than 370 organizations offering a DC plan and/or group RRSP participated in the survey.
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