If you are a contractor currently using a prevailing wage fringe benefit plan(s), you are aware of the benefits to not only your company but to your employees who work on prevailing wage projects. The question is, "Do you know all your responsibilities and obligations with having a plan(s)?"
Contractors Have a Fiduciary Obligation to Evaluate Their Plan(s)
The Department of Labor (DOL) regulations impart a fiduciary obligation upon contractors to regularly assess their current fringe benefit plan(s). It is the contractor’s duty as the fiduciary to exercise discretionary control over the management of the Plan assets in a prudent manner under ERISA guidelines. To act “prudently,” requires expertise in a variety of areas, including plan compliance and investments. Many contractors who lack specific expertise in these areas can choose to work with prevailing wage service providers who help the contractor fulfill their obligations under ERISA. It is important for contractors to realize that the selection of a prevailing wage service provider is, in itself, a fiduciary responsibility.
Federal regulation codes mandate contractors adhere to examining the plan at reasonable intervals. Performance of the plans trustee, administrators, record keepers and investment provider (s) should be reviewed by the adopting employer (contractor) in such manner as may be reasonably expected to ensure that the service providers have been in compliance with the terms of the plan and statutory standards, and satisfies the needs of the prevailing wage plan.
Contractors throughout the United States state the three key reasons for adopting a prevailing wage benefit plan(s) for their company is to:
- Save Labor Burden
- Bid More Competitively
- Attract and Retain Skilled Workers
The majority of contractors who have engaged Beneco’s services to access their current prevailing wage plan(s) have discovered their plan:
Has not met the definition of bona fide under the Davis-Bacon Act regulations. Often, the total fees and costs to the plan and the plans participants differed from what was disclosed in the marketing and sales material.
Has not outlined the fiduciary responsibilities associated with the plan.
- Has not utilized the maximum savings to both the employer and employees.
Contractors Partner with Beneco to Help Them with Fiduciary Risk
If you are a contractor with an existing prevailing wage plan(s), it is your obligation to seek expert advisors who can help alleviate your fiduciary responsibilities and requirements imposed by law. Under ERISA 338, Beneco is a recognized expert who acts as the Investment Manager for bona-fide prevailing wage plans. As such, Beneco selects the investments, monitors them and ultimately decides which funds are performing well or which need to be eliminated from the fund portfolio for under- performance. Beneco’s execution of these services alleviates the fiduciary responsibility from the contractor and takes on the liability for selecting and monitoring funds.
A Fiduciary is: