Video: Jeff Aarssen (Great-West Life) highlights strategies for group retirement plan success
2012 CAP Benchmark Report.pdf
Video: Jeff Aarssen (Great-West Life) highlights strategies for group
retirement plan success
Infographic: Strategies for group retirement plan success (CNW Group/GREAT-WEST LIFE)
WINNIPEG, March 6, 2013 /CNW/ - Research unique to the Canadian Capital
Accumulation Plan (CAP) market is now available through Looking Forward, the 2012 CAP Benchmark Report sponsored exclusively by The Great-West
Life Assurance Company.
"The CAP Benchmark Report allows sponsors to benchmark their plans in
order to create and maintain a successful group retirement program that
is competitive and helps better position each member to reach their
retirement income needs," says Jeff Aarssen, Vice-President Group
Retirement Services Sales & Marketing for Great-West Life.
The report also highlights strategies employers can use to dramatically
improve their group plan participation, enable better-suited investment
choices and ultimately assist more plan members in reaching their
These strategies include: encouraging early enrolment, promoting meaningful contributions, lessening the impact of withdrawals and providing investment choice including age-adjusted mix options.
"Plan sponsors are making efforts to help their plan members reach their
retirement income goals but there is still opportunity for
improvement," Aarssen says. "Advisors can also use this research to
provide their clients with further insight into survey results and
recommend plan design enhancements."
Now in its eighth year, the benchmark report is based on a survey by Benefits Canada / Canadian Institutional Investment Network of 380 organizations offering a defined contribution (DC) plan. Read the full report here. An educational video with commentary by Jeff Aarssen is attached and
can also be viewed at http://youtu.be/tJctjrsZo-0
Strategies and survey findings
Encouraging early enrolment: Many plan sponsors of CAP plans are taking steps to ensure members are
enrolled as early as possible so that members can benefit from
tax-effective growth of compound interest, investment returns and low
investment management fees. Most DC plans (71 per cent) have mandatory
participation and over half (57 per cent) of Group RRSPs and 32 per
cent of DC plans offer immediate eligibility. These strategies help
ensure members take advantage of the savings vehicles their employer
has offered them and better position them to meet their retirement
Promoting meaningful contributions: Plan sponsors can help promote meaningful contributions by making
attractive matching contributions, as the majority of plan members
continue to make contributions that attract the maximum employer match.
In 2012, the average employer match was 5.6 per cent for DC plans and
3.8 per cent for Group RRSPs.
Providing investment choice and addressing age-adjusted investment risk: Increasingly, plan sponsors are making age-adjusted investments
available, such as target date funds as their default option so that
plan members' savings are more inclined to grow even if the member
never makes an investment decision. In 2012, 34 per cent of DC plans
made target date funds their default option, up from 16 per cent in
2011. For group RRSPs, 28 per cent were target date funds, compared to
15 per cent in 2011.
Lessening the impact of withdrawals: Effective retirement saving requires that plan members keep their
contributions in the plan so they benefit from tax-effective compound
growth on their investment returns. As such, plans sponsors should
structure plans to discourage withdrawals.
Managed by Rogers Publishing Ltd., the 2012 CAP Benchmark Report
summarizes the results of updating plan sponsor profiles in the
Canadian Institutional Investment Network as well as the findings from
an online survey. The report represents an unbiased view of Canadian
group retirement market trends.
Data was collected between February 1 and August 8, 2012 from 380
organizations offering a Defined Contribution (DC) plan (308 plan
sponsors) or a group RRSP (180 plan sponsors) to their employees. In
total, 308 respondents have a DC plan and 180 have a group RRSP.
Results depend on the specific organizations that complete the survey,
which vary from year to year.
About Great-West Life
Great-West Life administers over 17,000 group retirement plans and over
1.3 million member accounts, representing over 30 per cent of capital
accumulation plans (CAPs) offered by insurers in Canada. In the United
States, Great-West is the fourth-largest group retirement plan
recordkeeper based on total participants and Putnam Investments adds to
the organization's North American presence in this market.
Video with caption: "Video: Jeff Aarssen (Great-West Life) highlights strategies for group retirement plan success". Video available at: http://www.youtube.com/watch?v=tJctjrsZo-0&feature=youtu.be
Image with caption: "Strategies for group retirement plan success (CNW Group/Great-West Life Assurance Company)". Image available at: http://photos.newswire.ca/images/download/20130306_C2535_PHOTO_EN_24304.jpg
PDF available at: http://stream1.newswire.ca/media/2013/03/06/20130306_C2535_DOC_EN_24308.pdf
SOURCE: Great-West Life Assurance Company
For further information:
Marlene Klassen, APR
Assistant Vice-President, Communication Services