Prevailing Wage

A 401(k) plan with prevailing wage provisions exists (primarily) as a means to reduce labor related burden, not because of an overwhelming desire to deposit large sums of money into an employee’s retirement account.

Whether Service Contract (SCA), Davis Bacon (DBA), or state prevailing wage, the decision to deposit required fringe monies into a 401(k) plan belongs to the employer, not the employee. This reality must be taken into consideration during 401(k) Plan Design.

A properly designed 401(k) plan with prevailing wage provisions saves a Contractor money and should be part of a well designed Employee Benefit Program.