If you’re a contractor working on prevailing wage projects, you already know how essential it is to comply with government requirements while remaining competitive. However, one area often overlooked is how fringe dollars can impact your bottom line and your team’s future. A custom retirement solution designed specifically for prevailing wage contractors can unlock significant financial benefits for both your business and your employees. Here’s why you should consider this tailored approach to maximize your prevailing wage fringe.

1. Applying Fringe Dollars to Benefits to Help Reduce Payroll Taxes and Insurance Costs

Did you know that using fringe dollars for benefits programs can significantly reduce labor costs? Fringe dollars allocated to benefits programs are removed from payroll, which avoids payroll taxes and additional workers compensation premiums to your annual audit.

By directing fringe benefits into a qualified retirement plan instead, companies can significantly reduce payroll taxes and workers compensation costs—potentially saving thousands annually.. For example, a contractor with 25 employees redirecting $5 per hour in fringe benefits to a retirement plan could save tens of thousands a year. These savings can then be reinvested into your business.

2. Maintain Prevailing Wage Compliance

Compliance with Davis-Bacon and Related Acts (DBRA) is non-negotiable for prevailing wage contractors. A custom retirement solution ensures you stay aligned with government requirements while efficiently allocating fringe dollars.

By placing fringe benefits in approved retirement plans, contractors can achieve full compliance and streamline reporting and auditing processes. This reduces administrative headaches while protecting your business from costly fines or penalties.

3. Attract and Retain Top Talent

The construction industry has one of the highest employee turnover rates, so attracting and retaining skilled workers is a growing challenge. Offering a robust retirement plan shows your employees that you are committed to securing their future, which can give you a competitive edge.

Fringe contributions toward retirement plans signal long-term investment in your team. Skilled tradespeople will value working for a company that values their financial well-being, enhancing employee satisfaction and loyalty.

4. Give Your Employees a Path Toward Financial Security

Construction workers are the backbone of the industry and deserve a stable financial future. However, many rely solely on cash benefits instead of long-term savings options. A custom retirement plan ensures that fringe dollars work harder for your employees by going directly toward their financial security.

Including professional financial education as part of the benefit package can further empower employees, helping them understand the value of saving for their future and how to make the most of their retirement plan.

5. Using Fringe to Customize Plans for Flexibility

Prevailing wage contractors have unique needs; cookie-cutter retirement plans won’t cut it. A custom retirement solution allows you to design a plan that addresses your specific goals and challenges.

With options like profit-sharing, safe harbor 401(k)s, and tiered employee contributions, you can create a plan that aligns with your business objectives while maximizing the impact of fringe dollars. This flexibility is essential for managing varying project sizes, workforces, and seasonal demands.

6. Stay Competitive in Bidding

Reducing payroll taxes and redirecting fringe benefits into retirement plans can significantly lower labor costs. These reduced costs can give you a competitive pricing advantage when bidding on government contracts.

A competitive financial edge means you can win more bids without compromising employee satisfaction or regulatory compliance, helping your business grow and succeed in a crowded market.

Securing Your Team’s Future Starts Today

Prevailing wage contractors are #AlwaysBuilding—whether it’s constructing essential infrastructure or securing the financial future of their valued employees. Managing fringe dollars through a custom retirement solution is an essential strategy that can help grow your business, strengthen your workforce, and ensure compliance.

Beneco has been building prevailing wage solutions for contractors for almost 40 years. From reducing payroll taxes to creating tailored retirement plans, we’re here to help you maximize your fringe dollars and simplify your benefits administration.

Want to find out how a custom retirement solution can transform your business? Get in touch with Beneco today and take the first step toward building a more prosperous future for your team and your company.