Prevailing Wage Plan: Employee Success Story
My last blog entry featured the success story of one of our heavy highway construction company clients. This time I want to focus on the success of one of our client’s employees. Our mantra has always been win-win! Our strategies and services only work when both the construction company AND their employees win. We are proud to provide this great example of an employee winning!
Type of Contractor: Electrical Construction
Location: Binghamton, New York
# of Employees: 50
Our featured employee is Charles, who is a single, 55-year-old journeyman electrician who works for a well-respected merit shop electrical construction company located in the southern tier of New York. The company began utilizing the DirectAdvisors Trust and our retirement plan services in 2001. They have a long-standing dedicated workforce of approximately 50 employees. Over 90% of their projects are subject to the prevailing wage regulations of New York.
During the last 16 years, Charles has had his account credited with $514,000 of prevailing wage fringe benefit dollars. These dollars have been used as follows:
- Medical, Dental & Life Insurance: $95,000
- Vacation / Holiday/ Sick Pay: $117,300
- Retirement Plan Contributions: $276,000
- Administrative Fees: $25,700
Charles’ retirement plan contributions are held in the company’s 401(K) profit sharing account which is managed by our team. As with a typical 401(k) plan, Charles is able to choose from a diversified menu of mutual funds. With assistance from our investment advisors Charles has structured a relatively conservative portfolio that currently has a balance of $558,000!
Keep in mind that all of Charles’ benefits were funded with $514,000 of prevailing wage fringe benefit dollars. Those contributions funded insurance benefits for 16 years, paid him over $100k of vacation / holiday / sick pay, and funded his retirement account with $276,000 (that has grown to $558,000).
How does this benefit his company? In addition to having a happy employee, the company has shielded $514,000 from payroll, resulting in an approximate payroll burden savings of $130,000 (workers’ compensation, FICA, liability premiums, etc.) — just for Charles!
A true win-win!
If you have additional questions please do not hesitate to contact us or download our whitepapers – “Harnessing the Power of Supplemental Unemployment Benefit Plans” and “Working the Fringe.”
Please also view our short animated video, to see how constructing a bona fide fringe benefit plan, can move prevailing wage dollars out of payroll and reduce associated costs. Increase profits. Submit more competitive bids. Build employee loyalty.
How We Can Help:
DirectAdvisors, established in 2001 and located in Albany, New York provides bona fide benefit plan consulting and third party administrative services to merit shop (non-union) construction companies that are subject to the Davis-Bacon Act, Service Contract Act and state prevailing wage regulations. Our clients are located throughout the United States and range in size from 10 to 3000 employees.
In 2015, our construction company clients contributed tens of millions of dollars of prevailing wage fringe benefit contributions to The DirectAdvisors Trust (health & welfare benefits) and retirement plans managed by our team.
Our solutions are free from any conflict of interest as we do not sell any financial or insurance products. We work with existing agents, brokers and insurance companies.