While 52 per cent of employee respondents said they would support automatic enrolment, just 27 per cent of employer respondents said they currently automatically enroll new employees into their capital accumulation plans, according to Benefits Canada’s 2016 CAP Member Survey.
“It is encouraging, overall, that there is an acceptance of auto features in retirement savings programs,” said Rod Smith, director of client services for the central region with Great-West Life’s group retirement services and a member of the survey’s advisory board. “If plan sponsors are wary of how auto enrolment and auto escalation would be received, there is some good news in the report that it wouldn’t be as big a challenge for them as they may think.”
But this disconnect between employer and employee views of auto features doesn’t appear to have changed much over the past two years. According to the survey, the percentage of plan sponsors that have mandatory participation in their defined contribution plan or group registered retirement savings plan has barely changed. Fifty-eight per cent of respondents to the 2016 survey have plans with mandatory participation for new employees. That was the exact same percentage as the 2014 survey.
The survey also asked plan sponsors for the main reason why their organization offers a defined contribution plan or group RRSP. More than half (54 per cent) of respondents said it’s part of the total reward offering. Another 41 per cent said it helps them remain competitive, while 34 per cent said they feel it’s the right thing to do. Twenty-five per cent of respondents offer their plans because their defined benefit pension had beome too expensive to maintain.
While employers are clear about the reasons they offer a plan, just two-thirds of respondents said they had achieved their objective. The numbers were fairly consistent since 2014, when 60 per cent of respondents said their plan met its objective.
Read more findings from the 2016 CAP Member Survey