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Retirement Solutions from The Contractors Plan |
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Crafting a retirement program for Service contractors which benefits owners, supervisory staff, and hourly workers while remaining compliant with the requirements of a bona fide benefit plan is a complex task. Retirement solutions offered by The Contractors Plan are built specifically for SCA contractors with compliance, ease of implementation and administration, and most importantly asset maximization in mind. We specialize in prevailing wage benefit plans, and understand how to leverage prevailing wage retirement contributions to create dynamic opportunities for owners and highly compensated employees.
We analyze each contractor’s situation and design a program to maximize every fringe dollar contributed.
- The Boost: Since the amount owners and key employees can defer into their own retirement accounts is tied to the amount non-HCEs defer, treating prevailing wage dollars contributed to a 401(k) plan as if they were elective deferrals drastically increases the amount owners and HCEs can save for retirement.
- The Profit-Sharing Offset: Counting prevailing wage contributions to employee 401(k) plans toward profit-sharing allocations significantly reduces costs.
- Safe Harbor Plans: Safe Harbor plan design allows employers to take advantage of both the boost and the offset features outlined above. Since prevailing wage contributions are immediately fully vested, they fulfill one of the major requirements for implementing a Safe Harbor plan.
- New Comparability: New Comparability plan design enables company owners to maximize contributions to their own retirement accounts by establishing two or more classes of employees. New Comparability rules allow employers to designate higher contributions to select employee groups, i.e. owners and key employees.
If a contractor already offers a 401(k) plan, we can set up a plan specifically for prevailing wage contributions, then test the plans together at year-end for compliance. Retirement plan options include:
- Basic Prevailing Wage Retirement Plan
- 401(k) Plan
- Roth 401(k) Plan
- Profit Sharing
- New Comparability
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