Do you have a retirement or 401(k) plan for your employees? Are you are bidding prevailing wage and public works projects that require a bona fide benefits program? Did you know you can save on FICA, FUTA, and other payroll taxes by contributing fringe benefit money into a pension?
Employees know that a job that offers them a good benefits package is one of the reasons to stay long-term with a company. Employers know that they should do what they can to retain their productive, dedicated, and trained workforce, especially in an environment when competition for skilled workers is stiff. Companies also know that to be competitive, any business tax deductions are helpful—anything that can be done to minimize the payroll tax burden improves a company’s cash flow.
One of the many reasons why associations exist is to offer various group benefits for their members. In our case, the Northwest chapters of AGC have combined efforts to offer a retirement and 401(k) plan exclusively for our members. This is no ordinary off-the-shelf plan—it is specifically designed to meet the unique needs of the construction industry. If you don’t currently offer a retirement plan, the Northwest AGC Chapters Retirement Plan may be the solution you need! If you already have another plan in place, consider comparing your current fees and plan flexibility to the AGC Plan. You will be pleasantly surprised.
Open to all AGC member companies from the Oregon, Washington, Idaho, and Alaska chapters, the association plan has over 6,000 participants from more than 120 employers, with more than $280 million in aggregate plan assets.
Options for employers include 401(k) and Roth 401(k), Davis Bacon (prevailing wage), safe harbor, matching, and profit-sharing contributions. With this plan employers are able award various classes of employees with different levels of profit-sharing contributions and participants may take advantage of a multi-fund approach that offers a full range of investment of options. As long as they meet IRS guidelines, employers can create a program for office and salaried employees or project-specific employees, with no set-up fees or employer cost outlays. The AGC team provides individualized support to help you design a plan that is compliant and best meets your company’s retirement goals.
Your participants will also be supported in the AGC Plan. Each individual receives quarterly statements to keep him or her current on account activity and can easily view and manage the AGC account online 24/7. Employees can contact the AGC Participant Benefits Center for assistance with transactions or with inquiries about account activity. Any employee who would like to speak to an advisor about investments or savings strategies can work with the plan’s certified financial advisor at no cost.
Individual participants can pick and choose from among 29 participant-directed investment choices, including 12 Vanguard institutional class “target retirement date” funds, and can make changes and control their portfolios as they wish. The plan’s investment lineup is closely monitored to ensure that each option continues to exhibit strong performance and low fees for that investment type.
All fees are paid by plan participants, so there are no invoices to an employer. The investment fund expenses vary by mutual fund, ranging from 0.035% to 1.10%. Administrative expenses depend on the employee’s balance and the overall employer balance in the program. As of June 2021, the weighted average investment expense ratio was 0.25%, and the average participant administrative fee was 0.30%. In total, the average participant paid 0.55% in fees, well under the fee rate of most other plans of this size and type. Further, the plan is expected to become even more competitive over time as the board constantly assesses whether fees can be further reduced or waived. In Q3 2021, for example, no participants will have any administrative fees charged—the plan’s efficient budget management and an expanding market have resulted in a large enough fee reserve that all individuals will get to enjoy a fee holiday.
Each AGC chapter in the Northwest region has staff and member seats on the Board of Trustees that oversees the Plan Trust. Trustees meet regularly along with the third-party administrators at NWPS and investment advisors at Reliant Consulting and Research to deliver a superior and competitive program to our members and their employees.
This plan unites simplicity and flexibility. The professional plan support team makes it easy to get started and to maintain. The Form 5500 tax filing is done for you, the trustees take responsibility for the fiduciary duty and oversight of the administration, and your accounting department won’t have to deal with monthly billing of employer and employee fees.
The Northwest AGC Chapters Retirement and 401(k) Plan is a fantastic AGC membership benefit that we encourage you to participate in.
Visit the NW AGC chapters retirement website for more information and specifics.