The New Capital Accumulation Plan (CAP) Guidelines: What Are They, What’s Changed, and How It Impacts Your Benefits Plan

Updated Capital Accumulation Plan (CAP) Guidelines came into effect in Canada on January 1. If you’re like most people, you’re probably wondering what this means for you - and worried that it means more work. However, the update actually clarifies expectations more than it introduces entirely new obligations. These updates are supposed to give plan administrators confidence, clarity, and care – not create unnecessary burden.

What are CAP Guidelines 

A Capital Accumulation Plan (CAP) is a tax-assisted workplace savings plan that allows employees to decide between two or more investment options offered within the plan.  CAP plans include group Registered Pension Plans (RPPs), Registered Retirement Savings Plans (RRSPs), Tax Free Savings Accounts (TFSAs) and Deferred Profit Savings Plans (DPSPs).

Unlike RPPs and DPSPs,  which are regulated by legislation, group RRSPs and TFSAs are not subject to provincial pension regulations.  This allows for significantly more freedom however also leaves exposure for more liability.  That’s where the CAP Guidelines come in.

The CAP Guidelines help plan sponsors, service providers, and members understand their rights and responsibilities.  While the Guidelines are not technically law, they are generally considered mandatory in practice.

Who do the CAP Guidelines apply to?

The CAP Guidelines apply to employers and plan sponsors who offer these kinds of workplace savings plans, as well as the advisors and service providers who support them. In practice, this means most organizations that offer a group retirement or savings plan fall under the scope of the guidelines.

Importantly, the guidelines are principles-based, not one-size-fits-all rules. Regulators are clear that expectations should scale with the size, complexity, and risk of the plan. A small business with a simple group RRSP is not expected to have the same level of governance, documentation, or oversight as a large organization with a complex pension plan. What matters is that there is some thoughtful framework in place to oversee the plan and support members appropriately.

It’s important to state, these guidelines have always existed. The focus has just shifted toward decision-making processes and ongoing oversight (rather than one-time setups) for better member outcomes.

What’s Actually New (and What’s Not)

The CAP Guidelines were updated to reflect how much workplace savings plans, and employee needs, have changed over time. More Canadians are relying on group RRSPs and TFSAs as their primary retirement savings vehicle, which places greater responsibility on both employers and employees to make good decisions.

At the same time, regulators are seeing increased complexity: more investment options, more default strategies, more digital tools, and greater expectations around transparency, governance, and member outcomes. The updated guidelines are meant to encourage stronger, more intentional oversight, without creating unnecessary burden. The goal is to help employers focus less on checklists and more on whether their plans are actually working for the people they’re meant to support.

What’s new or emphasized

• There is stronger encouragement around:

  • Governance frameworks

  • Regular reviews

  • Documented decision-making

• There is a greater focus on:

  • Member experience

  • Education and engagement

  • Default investment design

Every employer should have some governance framework. That framework should be right-sized, understandable, and useful rather than performative. 

What’s not required

• A 60-page governance document for small plans

• Institutional-level processes for small employers

• One-size-fits-all solutions

An organization with 10 employees does not need the same level of governance as a national organization. Good governance can be as simple as having clear roles and responsibilities and an annual check-in. All you need is confidence that there is regular oversight on the plan. 

It’s worth repeating: expectations are proportionate to plan size and complexity.

A Simple Way to Think About Plan Oversight: Five Core Areas for Review

When reviewing a workplace savings plan, there are five key areas that tell the real story, far beyond what performance charts alone might tell you. You can use these as guidelines for putting together your review framework.

Plan Purpose & Objectives

• What is the plan trying to achieve?

• Is it aligned with the values and vision of the organization? 

Participation and Engagement

• Are eligible employees joining the plan?

• What is the level of engagement with the tools and resources made available through the plan

Investment Options

• Are investment options suitable?

• Do defaults support long-term outcomes?

Member Education & Communication

• How are members supported in making decisions?

• Is education accessible and relevant?

Administration & Compliance

• How easy is it for HR and payroll to administer?

• How are decisions made and reviewed?

• Is there a clear, reasonable record of oversight?

Looking at all five areas together gives a much fuller picture than performance alone.

What Employers Should Do Next

Even though these changes might feel overwhelming, don’t panic. But, don’t ignore it either. Start with a simple review: 

o   Are the basics covered?

o   Are roles clear?

o   Is the plan being reviewed regularly?

The updated CAP Guidelines aren’t asking employers to do everything – just to do the right things, thoughtfully and consistently. Use the new year to step back, simplify and focus on what really matters: improving member outcomes.

Remember, support is available. If you’d like to learn more about the CAP Guidelines and review how your organization can implement a governance framework, reach out to Shannon for help.