CAP plan sponsors focusing on learnings from first six months of pandemic

While many Canadians panicked and stocked up on toilet paper when a global pandemic was declared in March, most capital accumulation plan members stayed calm enough not to make fund changes, according to a webinar hosted by the Association of Canadian Pension Management on Thursday.

“[We] found, overall, plan members appear to be staying the course and maintaining a long-term view,” said Kate Nazar, vice-president of strategy and market development for group retirement services at Sun Life Financial. Indeed, a study by Sun Life found that between March 1 and July 6 about three per cent of plan members made fund changes.

The small percentage of plan members — who tended be in the more risk tolerant age group of 30 to 49 — who didn’t stay the course and made fund changes tried to capitalize off low markets, but tended to fare worse than those that didn’t make changes, she said.

Educating employees about the benefits of not making rash decisions out of fear was and continues to be key, said Eleanor Marshall, vice-president of pension and benefits and assistant treasurer at Bell Canada. While a small percentage of plan members “perhaps panicked” and made three or more transactions earlier this spring, most stayed calm and carried on.

“We think our plan has withheld this stress pretty well . . . with some increased communication to help our members stay the course.”

Martin McInnis, executive director of the Co-operative Superannuation Society pension plan, agreed, noting that communicating more with members using digital communication and tools helped in the spring and will be continue to be important with news of the second wave and the resulting economic instability heightening.

The CSS plan was already strengthening its virtual communication tactics and online tools before the pandemic and will continue to do so. Using an array of tools, including apps, videos, virtual education, digital nudges and personalized prompts, to communicate with and educate plan members is now par for the course as traditional ways of communicating, said Janice Holman, a principal at Eckler Ltd.

Even before the global pandemic hit many Canadians employees and employers were worried about retirement savings or the lack thereof. Now that stress has been heightened, it’s important that employers support employee’s financial wellness, which in turn supports overall wellness.

“There’s been a COVID hierarchy of needs — first it was physical safety, then job security, then the third tier of need [is] supporting investment support [and now we’re looking] at that higher level of mental health as this drags on,” said Marshall.

Ultimately, she said, continuing to help plan members make good financial decisions to deal with current financial woes, as well as long-term retirement goals, will support strong financial and mental-health wellness among Canadian workers regardless of how long this once-in-a-century event goes on for.

This article originally appeared on CIR’s companion site, Read the full story here.