When establishing a 401(k) plan a business owner has a variety of employer contribution options that he or she may choose to make to the plan. These options range from no contribution to funding the maximum contribution for all employees. Whichever option the business owner chooses to go with can have a significant impact on the business’s profitability. Back in 2018 failure to adhere to prevailing wage guidelines set into play cost companies $304 million in back wages. Companies must pay 100% of the locally prevailing wage rate or suffer a major penalty. However, when enacting a prevailing wage pension plan, you may choose to pay the base rate to employees while contributing the fringe rate into a pension play. Doing this saves the amount you would have spent in payroll taxes, while simultaneously helping employees secure a comfortable state-of living for themselves upon retirement.
How to Make Davis-Bacon Plans Work For You
The Davis-Bacon Pension Plans are not one-size-fits-all. Business owners can customize a plan to best suit their business needs. Professionals at Davis-Bacon can help you determine which plan will work best for your company, as well as calculate how much this plan will save you in the long haul.
Low-Risk, High-Pay Off Solution
Going with a prevailing wage pension plan is oftentimes the most low-risk solution for a company. When businesses pay 100% of the prevailing wage upfront, they are now forced to make riskier moves to try and garner bids. This in turn drives up other costs businesses must pay such as payroll taxes, labor, and liability insurance. It becomes a conundrum because when businesses bid more jobs are lost, but when they bid less they are losing out on profitability. The Davis-Bacon prevailing wage pension plans make it so that everyone is happy and secure in his or her role.
If you want your business to prevail above the rest, it’s time to contact our team at Davis-Bacon Pension Plans, Inc. We’ve helped countless business owners generate maximum profit at the lowest cost to employees and to their bottom line. Contact our office today for more information (425) 889-8855.