The October 2024, Eckler Ltd. Capital Accumulation Plan Income Tracker (CAPit), Enhancing Capital Accumulation Plan outcomes in Canada, says despite declining annuity rates, capital accumulation plan (CAP) members retiring at the end of September 2024 will have experienced some of the best pension outcomes in more than 13 years.

“A male member, retiring at the end of September 2024 achieved a gross income replacement ratio of 65.4 per cent and a female member achieved 63.7 per cent. This is good news for CAP plan members and aligns nicely with the newly released CAPSA (Canadian Association of Pension Supervisory Authorities) Guideline for Capital Accumulation Plans which aims to improve member outcomes.” 

Better retirement outcomes 

Released on September 9, 2024, the updated CAP guideline, they say reflects the continued evolution of CAP practices in Canada. Developed in consultation with industry stakeholders over the course of two years, they add that the guideline is intended to give members the information needed to achieve better retirement outcomes.

“The guideline emphasizes ongoing member education with clear communication about CAP features, fees and retirement projections,” they write. “CAP sponsors should inform members about income options as they approach retirement to aid in better-informed financial decisions.” 

They add that sponsors should document governance roles and performance criteria, develop clear communication strategies, conduct reviews of service providers and ensure transparency about fees.

“The updated CAP guideline represents a significant step in enhancing the governance of Canadians’ retirement savings,” they conclude. “With a focus on clarity and accountability, CAPSA has sought to improve the effectiveness of CAPs as retirement savings vehicles and empower members to take control of their financial futures.”