Can a law from 1927 benefit your company 401(k) plan today? If you have employees being paid a prevailing wage the answer may be a resounding “YES!”
The Davis Bacon Act of 1927
For almost a century, the Davis-Bacon Act has been pivotal for federal contractors, workers, and those in states with prevailing wage ordinances. Initially addressing unfair labor practices, it introduced a unique retirement plan, offering payroll tax and insurance savings for employers and securing financial futures for employees.
Davis-Bacon Plans: A Win-Win Solution
Adding fringe benefits to retirement plans can provide advantages to both employers and employees. When a portion of fringe wages are put into a qualifying retirement plan those wages are not subject to payroll taxes. The employee sees more of their money deposited into a retirement account and the company pays less for things like unemployment, SS, Medicare or workers comp. For the right company the savings can be substantial, however there are factors to consider before implementing this type of plan. Give us a call today at 619-942-4510 or email jason@missionretirementplans.com to look at your situation in more detail.
Resources
There has been a lot of consolidation among record keepers in the past 10-15 years and one other thing you may want to ask any prospective record keeper is “will you be around in 10 years?”
Here are some links to provide more information on Prevailing Wage or Davis Bacon to help you figure out if this solution would work for you:
Call us at (619) 942-4510 to learn more or set up a consultation.