WINNIPEG, Jan. 9, 2015 /CNW/ - Ninety-seven per cent of defined contribution (DC) plan sponsors and 90 per cent of registered retirement savings plan (RRSP) sponsors say their plans are meeting their original Capital Accumulation Plan (CAP) objectives, reveals the 2014 CAP Benchmark Report, entitled Staying the course, with an eye on the future, available on the Group Retirement Services website.
Sponsored by Great-West Life, 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 enrolment, promote meaningful contributions, lessen the impact of withdrawals and provide appropriate investment choices."
The 2014 CAP Benchmark Report also shows participation rates among eligible employees for DC plans rose to 94 per cent from 91 per cent in the previous year, but declined for group RRSPs to 53 per cent from 65 per cent. 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."
The report advocates for these and other plan education techniques and design strategies that contribute to a successful group retirement plan, explored in sections on how quickly members can participate, how much sponsors and members contribute, the future focus of plans and investment choices offered.
Over 370 organizations offering a DC plan and/or group RRSP were surveyed to see what was working well and to identify critical areas for improvement and growth going forward.
Managed by Rogers Publishing Ltd., the 2014 CAP Benchmark Report summarizes the results of updated 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 March 1 and August 1, 2014 from 373 organizations offering a DC plan and/or a group RRSP to their employees. In total, 171 respondents have a DC plan, 90 have a group RRSP and 112 have both. Results depend on the specific organizations that complete the survey, which vary from year to year.
About The Great-West Life Assurance Company:
Great-West Life is a leading provider of capital accumulation plans in Canada, administering over 17,500* group retirement plans and almost 1.3 million* member accounts. In the United States, Empower RetirementTM, the retirement business of Great-West Financial®, is the second-largest retirement plan record-keeper by participants.
*as at September 30, 2014
SOURCE Great-West Life Assurance Company
Image with caption: "Sponsored by Great-West Life, the 2014 CAP Benchmark Report combines benchmark data with strategies to help employees reach their retirement goals. (CNW Group/Great-West Life Assurance Company)". Image available at: http://photos.newswire.ca/images/download/20150109_C4429_PHOTO_EN_10059.jpg
For further information: Marlene Klassen, APR, Assistant Vice-President, Communication Services, 204.946.7705