2013 CAP Benchmark Report

A popular report used by industry leaders to gauge the status of Capital Accumulation Plans (CAP) and CAP plan design trends, the 2013 CAP Benchmark Report provides insight on trends plan sponsors should consider for future plan administration and the development of new plan designs.

Highlights…

  • For defined contributions (DC) pension plans with less than 500 employees, immediate eligibility for employee participation has increased since 2012 by 19%.
  • To increase participation of employees, consider providing regular education which educates employees on the power of compound growth and other benefits of participating in a company sponsored retirement savings plan.
  • Company contributions have increased over the last 4 years; from an average of 4.6% to 6.5%.
  • Basing company contributions on employee contributions could encourage employees to increase their contributions.
  • Mandatory participation with auto-escalation in employee and company contributions based on years of employment or salary increases, a trend in the U.S., could increase member engagement.  See report for examples.
  • Usage of Target Date funds continues to increase, especially as a plan’s default fund.
  • When including features into a plan design to increase employee participation and engagement, companies should not forget to educate members on the impact of withdrawals.  More companies are offering access to third-party financial advisors who would assist members with a long-term financial plan and explain the impact of early withdrawals on financial goals.