Advertise
Resources
Member, Beacon International Group, Ltd.
Nearly 40% of Canadian pension plan sponsors automatically place participants who do not elect an investment option into conservative investments, a survey concludes.
In a survey of Canadian employers, Toronto-based human resource consulting firm Morneau Sobeco found that 39% of capital accumulation plan sponsors focused on managing potential participant dissatisfaction by placing nonelecting individuals into low- or no-risk investments. CAPs are a kind of savings plan that allow participants to chose among investment options.
Another 31% eliminated the problem by not allowing participation in the plan until investment choices were specified, the survey found.
Four out of five large employers-those with more than 5,000 employees-set the default option to be a balanced or "lifecycle" fund, which generally offer an asset mix based on the participant's age, the survey said.
Survey results were based on responses from 97 employers across Canada. The survey can be found at www.morneausobeco.com/en/home.asp.