Case Study:

Innovative Solutions for Retirement Contributions

AssuredPartners Government Contractor Solutions

Quick Facts

Type of Operation: Construction

Number of Employees: 50

Brokerage Services Provided: Retirement & Pension Plans; Employee Benefits; Prevailing Wage Expertise

Valued Client Since: 2019

Problem

Growing construction firm won their first prevailing wage covered contract. Being a Davis-Bacon Act covered federal contract, the contractor was required to provide a stipulated amount of prevailing wage to employee job class (carpenter, mason, electrician) and also a fringe benefit component. The contractor had the choice to pay the prevailing wage and the fringe benefit in cash or a combination of wages and benefits. Realizing their employees made less money on their commercial or non-government contracts, the contractor needed a solution to normalize the pay between the contracts while also improving profitability.

Solution

AssuredPartners Government Contractor Solutions team developed an hourly priced benefit package consisting of health benefits and retirement. By allocating an hourly contribution towards the specially designed retirement plan, the contractor could normalize the pay benefit the different types of work (commercial and prevailing wage). This would help the contractor move employees between jobsites without concerns on pay differences and allowed the contractor to avoid paying payroll burden and work comp on those prevailing wage dollars sent to a bona fide retirement plan.

Results

The contract did indeed save on the payroll burden and simplified the hiring and management of their employees between contracts. The employees found value in the retirement contribution made on their behalf by the contractor, and the contractor was able to bid more competitively on new contracts.