CAP Sponsors Focusing More on Participant Investments: Report

March 18, 2005 ( - A new poll indicates that Capital Accumulation Plan (CAP) sponsors are becoming more proactive in helping participants make investment decisions.

According to Morneau Sobeco’s “60 Second Survey,” 39% of CAP sponsors focus on managing potential short-term participant dissatisfaction by putting all non-specified contributions into low- or no-risk investments, according to a news release from the company. Thirty-one percent have eliminated the problem altogether by not allowing participants to enter the plan until they have specified what investment choice they want.

Defined contribution plan sponsors were found to be much more likely than their Canadian RRSP/DPSP sponsors (by a margin of 34% to 17%) to default contributions to a balanced or lifecycle fund. This trend is seen even more at large companies (with over 5,000 employees), where 80% of sponsors opt for such investments.

Some 62% of small plans (under 1,000 members) had a sponsor who reported they were unaware whether they receive any membership account investment reports or do not take action based on such reports. Fifty-seven percent of larger plan sponsors assert that they monitor and adjust their general communications or education strategy based on such reports; however, few state that they discuss poor asset mixes directly with employees.

Morneau Sobeco ( ) is a human resource consulting firm with 950 employees across North America.