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Government Contractors: It’s Time to Get Out of That Simple IRA

September 27, 2013 Written by: Written by Adam Bonsky, EVP Government Markets. SIMPLE IRAs are not effective for government contractors who work on prevailing wage jobs. Consult a benefits provider who specializes in prevailing wage benefits plans to set up a retirement plan that works with prevailing wage contributions and complies with applicable laws and regulations.

Traditional retirement plans just don’t work for government contractors. If your company uses a SIMPLE IRA, you need to make changes NOW to ensure compliance and maximize your plan.

  • SIMPLE IRAs have significant limitations when it comes to prevailing wage projects
  • SIMPLE IRAs cannot be used in conjunction with a prevailing wage plan or any other retirement plan

November 1st is the deadline for making changes to your SIMPLE IRA.  The IRS requires that employees be notified of a SIMPLE plan termination before the 60-day enrollment period for 2014.

If you’re not utilizing a retirement plan provider that specializes in working with prevailing wage contractors, you’re likely not getting the most from your plan. As a business owner, are you limited as to the amount you can put away for retirement? Are you getting refunds? Having trouble with non-discrimination testing? It’s time to work with a provider who understands government contractors and prevailing wage laws.

Using the fringe to provide benefits for your hourly workers on government contracts can also reduce your payroll burden by 6.5% or more. Contact us at 1-800-328-1519 for more information on how to make your retirement plan work for your business and your employees and compliant with government regs.