Solving the Retirement Crisis: Using Prevailing Wage to Fund Employee Benefits
Beneco, the prevailing wage benefits expert, helps build a bright future for construction businesses and their employees nationwide
For more than three decades, Beneco, the nationwide expert in unique employee benefits for the construction industry, has allied with contractors to empower them to build their businesses, while simultaneously building a more secure and prosperous future for their valued workers who depend on them.
While retirement plans and health insurance may just seem like administrative obligations, it is the human element behind these and other employee benefits that is at the heart of what matters most to Beneco. Its dedicated team has witnessed countless stories firsthand of how a robust prevailing wage benefits package can change the lives of workers—and their employers—in a very real way.
Employees Retiring as Millionaires
It’s no secret that people do not have enough money saved for retirement. “In the overall U.S. population, the average saved at retirement is roughly $100,000. In the construction industry, it’s often less than $5,000,” remarks Kristy Bryson, Beneco’s CEO. In light of this ongoing crisis regarding long-term financial security, Beneco’s solution is changing the status quo. By using Beneco’s prevailing wage retirement plan, Beneco is seeing employees of its plan sponsors retiring as millionaires.
“We had one plan participant who had worked in prevailing wage positions at his company throughout his entire career. Due to his company building its business around prevailing wage work and their partnership with Beneco, he recently retired with close to 2 million dollars,” Kristy notes. “He and his employer were so thrilled that they invited our team to his retirement party! We felt so honored to be able to share in such a special occasion and see the real-world impact of our plans.”
Seeing these balances grow and knowing that plan participants can safely retire with a secure financial future is something that is really important to the Beneco team. It’s especially gratifying for them to hear stories of plan participants talking among themselves, sharing with co-workers how their financial outlook has grown.
Employers Building Their Businesses
Employers, too, can reap the benefits. One example is a business Beneco came across about five years ago. This company worked almost exclusively in the prevailing wage space, but they were paying the fringe through payroll, instead of paying for benefits.
Kristy shares how the Beneco program set this company on a new, upward trajectory. “At the time, this company had about 45-50 employees. Once they started using the fringe to pay for benefits, it allowed them to bid more competitively, thereby growing their business substantially. Since 2015, they’ve tripled in size! I had a conversation with them earlier this year, and the owner admitted he never thought he would have been able to build his business to this size, especially this quickly. He now has about 150 employees and is still growing; they’ve tripled in revenue as well.”
Educated Consumers See Potential
The opportunity is out there for contractors, even though some are a bit apprehensive. It can, for some, seem too good to be true. Beneco’s plan experts reassure professional construction businesses that there’s great potential as long as they are compliant and using it for the qualified benefits.
Jason Sperfslage, Beneco’s Director of Sales, explains that among the most important things for employers to understand is why using fringe dollars to fund benefit plans is a competitive advantage. He says, “For one thing, by using fringe dollars you’re reducing costs because you don’t have to pay labor burden on fringe dollars and you’re offsetting the cost of health insurance premiums. Plus, companies are helping to fund their employees’ retirements, giving them security for their futures and playing a role in averting the retirement crisis that exists within the construction industry.”
More than just retirement funding, using fringe dollars in this way also allows companies to offer health insurance to their employees, which can be a huge differentiator in attracting and retaining quality employees, keeping these companies competitive especially in light of the skilled labor shortage the industry is facing.
“Oftentimes,” Jason says, “our clients know they would like to offer better benefits for their employees but they think they can’t afford it. Beneco’s solutions allow them to do so at a much lower cost to the company.”
Dwight Sawin, Beneco’s CFO, adds that one thing Beneco hears often from businesses is that prevailing wage jobs can be complex to administer and at times it might deter contractors from bidding on these jobs. “I’ve even had contractors tell me that they make no money on these prevailing wage jobs, and it’s really a shame because these could be their most profitable jobs. With Beneco as a partner, we’ve seen clients go from doing a few prevailing wage jobs a year to building their business solely around these projects. Through a little education, they now understand how they can win bids, increase their bottom line, and fund a robust benefits package for their employees.”
To serve the construction industry even better, this past August, FuturePlan by Ascensus acquired Beneco. This is a great advantage for Beneco’s clients and their employees alike, as FuturePlan will support Beneco’s goals of offering advanced expertise in the increasingly complex and competitive prevailing wage market, without interfering with day-to-day service and operations.