The average income replacement ratio of capital accumulation plans in the second quarter of 2017 has remained stagnant since the start of the year, according to Eckler Ltd.’s latest capital accumulation plan income tracker.

The report noted that decreasing investment returns during the quarter weren’t significant enough to change the income replacement ratio, which remains at 59 per cent for men and 57 per cent for women.

Still, the report noted the importance of equity allocations in maintaining the positive results in the future.

Read: Average CAP income replacement level remains steady in Q1: report

“When we review how DC members are investing, both in a la carte and in target-date funds, we see many allocating and choosing overly conservative options,” said Janice Holman, principal and defined contribution practice leader at Eckler, in a news release.

“With the benefit of declining interest rates behind us, plan members will have to allocate additional amounts to equity — just as many target-date families are doing — to be able to reach an appropriate replacement rate.”

Holman suggests plan sponsors consider the ways members are choosing investment allocations, their record-keeper investor profiles, the enrolment process and the systems in place to try to help employees reach an asset allocation that will help them meet their goals and lead to the best outcomes.

Read: 2016 CAP Member Survey: Deconstructing how different employees view their retirement

Copyright © 2020 Transcontinental Media G.P. Originally published on

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