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New CAP Guidelines are Coming – What to Expect in 2024

CAP Guidelines were developed by the Joint Forum of Financial Market Regulators to develop standards across Canada designed to help organizations deliver savings plans to employees in a transparent, fair, and responsible manner. This article outlines the possible changes in 2024.

Capital Accumulation Plans (CAPs) are just a fancy word for an employer-provided group savings plan, where an organization may match ((or not) employee contributions to an RRSP, TFSA, or a Deferred Profit Sharing Plan (DPSP) for example.


Back in 2004, when the first CAP guidelines were published, we lived in a very different world. Mark Zuckerberg was in his college dorm room dreaming up Facebook, and Google had 32% market share of search engine market share… behind Yahoo.  


The goal of those first guidelines presented by the Joint Forum of Financial Market Regulators were to develop standards across Canada. But since then, capital accumulation plans have changed significantly: 

  • Defined contribution plans have increased in number and in number of assets

  • Digital assets have become much more commonplace; logins from mobile apps have become more common than online enrolments, and online enrolment is now the norm vs. paper applications

  • Target date funds have risen in popularity and complexity

  • There has been an increase in alternative asset classes. Some of these are complex and can have liquidity issues

  • TFSAs have introduced a whole new dimension to Capital Accumulation Plans

With those changes in mind, we anticipate several changes to Capital Accumulation Plans in the upcoming guidelines, which are expected to be released in mid- to late 2024.  

Tools and Advice 

Plan Sponsors should consider providing a list of tools to plan members and promote the tools available through the service provider.  


The new guidelines may outline the need to conduct a sensitivity analysis on the assumptions built into the tools themselves. For example, if retirement income assumes of 4% rate of return, the employee should be offered an analysis that shows what the rate of return would look like if the actual rate of return is higher or lower.  


If the plan sponsor is offering financial advice to plan members via an outside provider, the plan sponsor should define what type of advice is being provided, provide transparency into why that provider has been selected, and whether a conflict of interest is present.  


Education and Communication 

CAP Sponsors should periodically refresh employees on the benefits of the plan, including: 

  • Benefits of not delaying enrollment into the plan

  • Whether plan members can opt out and re-enroll later

  • How to take advantage of the CAP plan

  • Highlight any cases where there is a possibility that investments cannot be liquidated


Governance Changes 

Our governance documents may look different in future years. For example, a review of the retirement income options available within the CAP such as Retirement Income Funds, Lifetime Income Funds will likely be included. Service providers are similarly watching to see what changes will unfold with the new CAP Guidelines and provide more information to include in our annual review.  

We know that group retirement plans reduce turnover and associated costs. We’re excited that the guidelines used to ensure that these plans meet the needs of plan members are continuing to evolve. We look forward to evolving with them.  


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