The vast majority of capital accumulation plan (CAP) members don’t have a financial plan, yet many still say they are prepared for retirement.

That’s according to results of the eighth annual CAP Member Survey, which were reviewed in a panel discussion at Benefits Canada’s Benefits & Pension Summit in Toronto.

Fifty-six percent of plan participants say they’re on track to meet their targets for the amount of money they need to save, but only 21% have a formal written financial plan.

“It is disturbing and alarming that 80% don’t have a financial plan,” said Ken Millard, vice-president, national accounts, group retirement services, with Great-West Life.

The more that the decision-making is taken out of CAPs, the more it can help plan members. A way employers can do that is by providing a good default option.

Two-thirds of plan members expect that the default option chosen by their employer will provide them with adequate funds for their retirement.

“People are not interested in being investment consultants,” explained Sarah Donahue, director, consultant relations, with MFS Investment Management Canada. She noted that money market funds aren’t an appropriate default option and target-date funds are better, but they’re not perfect.

In order to help plan members save more, auto-enrollment is an option, and there is support from employees for that choice.

Seventy-four percent of plan participants support auto-enrollment with the ability to opt out, as do 58% of non-plan participants.

It encourages participation, said Anna Pagiluca, associate vice-president, group savings and retirement, with Standard Life. “I think it is important. It helps members start early.”

While not everyone wants to be part of the retirement plan, many employees who aren’t members of a CAP are considering joining. Thirty-seven percent are likely to sign up, 19% are uncertain, and 44% aren’t likely to join the employer-sponsored DC pension or group RRSP.

In life, there are both savers and spenders. For employers, it’s a journey, explained Anita Lieberman, regional vice-president, group retirement savings, with Desjardins Insurance. “It’s getting people to join the plan and getting people to take advantage of the plan.”

All the articles from the event can be found on our special section: 2014 Benefits & Pension Summit Coverage.

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Copyright © 2019 Transcontinental Media G.P. Originally published on benefitscanada.com

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