Types of Savings Plans
There are many different types of Capital Accumulation plans (CAP) in use today. The options extend well beyond the traditional pension plans. Companies, both large and small are offering:
- Traditional RRSP plans.
- Tax-Free Savings Accounts (TFSA)
- Registered Education savings plans (RESP),
- Deferred Profit Sharing plans (DPSP)
Design, Implementation and Monitoring
The development of sophisticated computer systems has allowed the major insurance companies to provide the smaller companies with all the power and flexibility normally associated with the very large corporate user.
Between $10,000 and $75,000 in total annual contributions
This can be companies with only 2 or 3 employees
These plans are 'packaged investment option' systems
The beauty is: they can be implemented with NO FEES
Over $75,000 in total annual contributions
With as few as 15 employees, you can easily reach this level
These plans offer customized investment options
There are annual administration fees, however, the Management Expense Fees (MER) are substantially less than retail mutual funds
Capital Accumulation Plan (CAP) Guidelines
In May 2004 the industry established CAP guidelines for plan members, Sponsors (the companies that implement a plan for their employees), financial planning professionals (like TOLCO Financial $trategies) and the carriers (e.g. Sun Life, Great-West Life, Fidelity Investments, etc.). These guidelines define the obligations of each party.