Human Resources: Buck Consultants Survey Finds Employee Confusion over Investment Options a Top Concern

TORONTO: May 20, 2008 — Canadian employers who sponsor defined contribution (DC), or capital accumulation plans (CAP), are worried that their employees don’t understand their choices under the plan in spite of concerted communications efforts, according to a nationwide survey of Canadian plans released today by Buck Consultants.

The study, “Moving Forward – An Overview of Capital Accumulation Plans in Canada,” found that 74 percent of CAP sponsors think members are confused about investment options. The Buck Consultants survey of more than 150 employers was conducted in the third quarter of 2007 and is the second of three installment reports on employer-sponsored pensions in Canada. The first report studied defined benefit plans, and a third report on supplementary retirement plans will be released shortly. Buck conducts this comprehensive survey in Canada every four years.

Peter Arnold, Buck’s National Practice Leader for Investment and DC Consulting in Canada, expressed some surprise at the number of sponsors indicating that members are confused about their options, since 81 percent of respondents have a formal communications strategy. The survey found that 57 percent of sponsors offer more than 10 investment choices, a significant increase from the 2003 survey, where only 40 percent offered more than 10 options.

“The more options you give employees, the less likely they are to actually make informed choices, and that can fuel investment ‘by default’,” said Arnold. “Many plan sponsors are struggling with the issue of the default fund, since this choice, which is fiduciary in nature, could put them at risk in the future.” Yet 65 percent of sponsors do not actively manage members’ use of default funds. “Overuse of the default fund is another ‘call to action’ to revisit the communications strategy,” added Arnold.

"Many well-run CAPs are taking a less-is-more approach to helping employees get through the investment maze," said Arnold. "Fewer investment options, more delegation of responsibilities to service providers and a better understanding of employee investment patterns are the new priorities for sponsors.”

CAP sponsors’ other top concerns include:
·       Governance and compliance issues (68%)
·       Benefit adequacy (68%)
·       Employee satisfaction (66%)
·       Cost containment (64%).

Buck Consultants, an ACS Company, provides a full range of human resource consulting and administration services, and has been providing HR consulting and actuarial services in the Canadian marketplace for more than 35 years. Our Canadian suite of services includes health and welfare consulting, total benefit outsourcing services for traditional and flexible group benefit plans, capital accumulation plans, and defined benefit pension plans, retirement consulting (including actuarial services and tax and legal consulting), investment consulting and communications services. News and other information about Buck is available at www.acsbuckcanada.com.

ACS, a global FORTUNE 500 company with more than 63,000 people supporting client operations reaching more than 100 countries, provides business process outsourcing and information technology solutions to world-class commercial and government clients. The Company’s Class A common stock trades on the New York Stock Exchange under the symbol “ACS.” Learn more about ACS at www.acs-inc.com.

The Buck Consultants survey report, “Moving Forward – An Overview of Capital Accumulation Plans in Canada” is available to the media by contacting Marina Scassa at 416-865-0060. It is available to other interested parties for US$400 from Buck’s Global Survey Resources, 500 Plaza Drive, Secaucus, NJ, 07096-1533. Telephone 1-800-887-0509. It also can be ordered online at www.bucksurveys.com.

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