The basics: the ABCs of the CAP guidelines
First stop, let’s break down the essentials.
What are the CAP guidelines?
The Capital Accumulation Plan (CAP) guidelines are a set of principles and expectations developed by the Canadian Association of Pension Supervisory Authorities (CAPSA). Think of it as a map to help you steer your plan in the right direction. They cover everything from governance and risk management to member education and provider oversight—ensuring your plan operates smoothly and effectively.
How do the guidelines help you?
By following these guidelines, plan sponsors can better support their members and ensure their plans are run with transparency, accountability, and care. Specifically, the updated guidelines do the following:
Provide greater clarity on your responsibilities
Establish standards to help you limit your risks
Help you better support your members' financial wellness
Who is CAPSA?
The Canadian Association of Pension Supervisory Authorities, also known as CAPSA, are a national association of pension regulators behind the new guidelines. Their purpose is to facilitate an efficient and effective pension regulatory system in Canada.
What is the purpose of a CAP?
The purpose of a CAP, which is a tax-assisted investment or savings plan or program, is to provide savings or retirement income to members. They allow plan members to make decisions among two or more investment options selected by the plan’s sponsor.
What CAPs are included in the guidelines?
The following CAPs are covered by the guidelines:
- defined contribution pension plans (DCPPs) with or without variable post-employment benefit options
- registered retirement savings plans (RRSPs)
- deferred profit-sharing plans (DPSPs)
- locked-in retirement accounts (LIRAs)
- registered retirement income funds (RRIFs)
- life income funds (LIFs)
- pooled registered pension plans (PRPPs) or voluntary retirement savings plans (VRSPs)
A CAP also includes tax-free savings accounts (TFSAs), registered education savings plans (RESPs) and first home savings accounts (FHSAs) even though these plans may not be intended for retirement savings/income purposes.