If you currently offer a group savings plan or are considering doing so, you may have heard that guidelines are changing with respect to CAP guidelines. In this article, we've outlined the key considerations of the changes taking effect on January 2026.
For existing clients, you’ll notice that the vast majority of these components are already a part of the governance review process. We’re looking forward to ensuring that our tools and reporting continue to deliver peace of mind to your organization.
Enhanced Governance
Governance Framework: Establish a governance framework that reflects the size and complexity of your CAP.
Roles and Responsibilities: Ensure a clear description of roles and responsibilities.
Review Process: Document the process for reviewing plan governance, service providers, and investment performance.
Broader Focus on Outcomes
Sustainable Retirement Income: Emphasize outcomes for CAP members beyond just investment options, focusing on sustainable retirement income.
Retirement Goals: Implement features that help employees reach their retirement goals effectively.
Member Education and Engagement
Continuous Education: Member education is now a continuous requirement, not just a one-time effort at enrollment.
Ongoing Tools: Employers are expected to offer ongoing education and tools to help plan members make informed decisions.
Enhanced Communication: Provide personalized materials, annual performance statements, and transparent explanations of fees.
Suggested Annual Checklist for Sponsors
Review Governance Framework or Process Document.
Review Reporting on Plan Engagement.
Additional Actions
Review Investment Options for Retirement Defaults such as Target Date Funds.
Evaluate Service Provider for Enhanced Retirement Features.
Schedule Webinar for Ongoing Plan Education.
Review Member Communications & Annual Materials.
The CAP guidelines aim to ensure that CAP sponsors provide a robust framework and continuous support to help employees achieve their retirement goals.
Please feel free to contact us to learn more about the upcoming changes to CAP guidelines and our strategies to support our clients.
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