Canadian HR Reporter

F E A T U R E S 26 www.hrreporter.com SUCCESSFUL CAPs INVOLVE INNOVATION To unlock a workplace retirement program's full potential, employers need to adopt greater innovation to truly engage their workforce and boost support of employees' total financial well-being, says Rosalind Gilbert of Aon WORKPLACE capital accumulation plans (CAPs) have become increasingly prevalent in providing retirement security for Canadian employees. Employers can customize a retirement savings program for their workforce, choosing to implement one or a combination of CAPs that might include a defined contribution (DC) pension plan, group registered retirement savings plan (RRSP), deferred profit-sharing plan (DPSP), tax-free savings account (TFSA) or non-registered savings arrangements. Properly developed and administered, such plans not only provide a valuable comfortable retirement, and they recognize the need to better engage employees in optimizing their retirement benefits. The not-so-good news: While many employers express an interest in exploring new ways to improve value in their CAPs, they are still relatively conservative in their adoption of recent innovations. To unlock a workplace retirement program's full potential, employers need to adopt greater innovation, engaging their employees and expanding support of employees' total financial well-being. The Aon report shows that employers want to deliver greater value and produce better employee outcomes in retirement. Critically, however, many of them struggle when it comes to engaging employees in that effort, which presents a significant roadblock to realizing the full value of CAPs — especially those that rely on employee involvement. Survey respondents identified four keys to plan success, with almost nine out of 10 employers choosing one of the following goals as their top choice: improving employee financial IQ (31 per cent), increasing overall savings for better retirement outcomes (24 per cent), providing flexibility for emerging retirement patterns (24 per cent) and offering better retirement income options (13 per cent). Gap between intentions and results However, when asked what measures plan sponsors are taking to achieve those objectives and how effective they are, a clear gap emerged between intentions and results. For instance, most employers agreed benefit to employees in retirement but can also serve as a key tool in employers' efforts to attract and retain high- performing employees. The good and the bad news The good news is that Canadian employers understand the vital role CAPs play for their organizations and employees, according to a recent study by Aon. Our 2020 Canadian Capital Accumulation Plans Employer Survey, based on interviews with more than 100 organizations across the country, found that employers are focusing on supporting workers to plan for a KEYS TO PLAN SUCCESS 31% Improving employee financial IQ 24% Increasing overall savings for better retirement incomes 24% Providing flexibility for emerging retirement patterns 13% Offering better retirement income options that they have an important role in helping workers improve their understanding of finance and retirement. Many employers in the survey provide education on saving for retirement (62 per cent) or financial planning (42 per cent). Yet it is not clear that the messaging to employees is producing effective action. More than two-thirds (70 per cent) of employers pointed to concerns that employees were not engaging with their plans or using them effectively. Meanwhile, many are worried that employees are not accessing available resources (38 per cent) and one in five highlights a concern that eligible workers are not joining the plan at all. How can employers bridge this gap? One key lever is plan design. A CAP with an underlying smart design promotes member engagement and leverages automation and inertia. Almost 70 per cent of responding employers offer a variety of plan types so that employees can choose the best combination of options to meet their personal savings goals and retirement income needs. More than half say that Source: Aon F O C U S O N : F I N A N C I A L W E L L N E S S

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