Prevailing Wage Plan: Employee Success Story #2
At DirectAdvisors our idea of success includes our clients as well as their employees. This success story focuses on 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: Mechanical / HVAC
Location: Syracuse, New York
# of Employees: Approximately 50
Our featured employee is Aaron, who is a married, 43-year-old HVAC installer and pipe fitter. The company began utilizing the DirectAdvisors Trust and our retirement plan services in 2002.
During the last 16 years, Aaron has had his account credited with $422,000 of prevailing wage fringe benefit dollars. The funds have been used as follows:
- Medical & Dental Insurance $212,000
- Vacation / Holiday / Sick Pay $15,000
- Retirement Plan Contributions $168,000
- Supplemental Unemployment $16,000
- Administrative Fees $11,000
Aaron’s retirement 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, Aaron is able to choose from a diversified menu of mutual funds. With the assistance from our investment advisory team Aaron has structured a moderate portfolio that currently has a balance of $428,000!
Keep in mind that all of Aaron’s benefits were funded with $422,000 of prevailing wage fringe benefit dollars. Those contributions funded insurance benefits for 16 years, paid him $15,000 of vacation / holiday / sick pay, $16,000 of supplemental unemployment benefits when he was on seasonal layoff and funded his retirement account with $168,000 (that has grown to $428,000).
How does this benefit the company? In addition to having a happy employee, the company has shielded $422,000 from payroll, resulting in an approximate payroll burden savings of $118,000 (workers’ compensation, FICA, liability premiums, etc.) – just for Aaron!
A true win-win!
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 3,000 employees.
In 2018, our construction company clients will contribute 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.
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.