February 27, 2024
How important is governance to the success of a CAP?
Changes are coming to the guidelines for capital accumulation plans. See how a good governance framework could help sponsors get ready.
Navigating the CAP Guideline
If you have a role in setting up and managing a retirement savings plan in Canada, the guideline for capital accumulation plans (CAP Guideline) provides a framework of best practices that can be key to a successful CAP. Understanding the guideline and how to incorporate it can help you build a successful plan and maximize its value to members.
Setup, maintenance, and oversight of a CAP
- Roles and responsibilities
- Defining the purpose and features of a CAP
- Selecting service providers
- Periodically reviewing all aspects of the plan
- Terminating a CAP or member
Investment selection and monitoring
- Selecting a suitable investment lineup for the plan
- Monitoring of investment options and funds
- Ensuring competitive fees
Member onboarding, education, and ongoing communication
- Supporting member enrolment and investment selection
- Helping drive successful outcomes with educational resources and decision-making tools
- Providing access to account and plan information
- Selecting a third party to provide financial planning advice to members
Fee management and disclosures
- Ensuring competitive fees
- Disclosing those fees to the members
Clarifying roles, responsibilities, and definitions
The guideline elaborates on roles, rights, and responsibilities of key CAP players, and expands the list of plan tax types covered by the guideline, to reflect the market.
Enhancing member education, engagement, and outcomes
The sponsor should adopt a strategy designed to improve decision-making and outcomes. This includes developing an education strategy, providing members with projections, and giving them access to tools and advice.
Using automatic features
The sponsor may consider whether to set up automatic features to improve outcomes, such as auto-enrolment or auto-escalation of member contributions. The guideline establishes a framework for offering these features.
Expanding on oversight
The guideline elaborates on oversight activities, expanding it to include reviewing fees and expenses, member education, and the governance framework.
Investment selection, monitoring, and advice
Additions include factors that the sponsor should consider when selecting investment options and selecting a third party to offer investment and financial planning advice to members.
Establishing governance
The sponsor should set up a governance framework appropriate for the nature (size, complexity, and other characteristics) of both the CAP and the sponsor. The guideline details what such a framework would include.
Webinar: Understanding the modernized CAP guideline
Choose a session on the date and language of your choice and click the link to register.
English
Thursday, October 17, 1:00 P.M., ET
Tuesday, October 22, 1:00 P.M., ET
Tuesday, October 29, 1:00 P.M., ET
French
Tuesday, October 22, 3:00 P.M., ET
Tuesday, October 29, 3:00 P.M., ET
This webinar will qualify for continuing education credits.
Our speaker:
Marc-Antoine Morin
Head of Member Engagement, Canada, and Member of the Retirement Committee of the Canadian Life and Health Insurance Association
Position paper
Our position paper gives an overview of the most notable changes to the CAP Guideline and offers our perspective on the likely impacts.
Viewpoints
Useful links
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