SUB Plan, Savings for Everyone!
No payroll tax or workers comp liability
ARROW Contractors Trust SUB Plan, otherwise known as the ARROW Contractors Trust Supplemental Unemployment Benefit Plan, is “the most popular” plan sponsored by ARROW Contractors Trust.
Background
- Prevailing Wage jobs require the employer to pay employees based on various Department of Labor wage determination schedules
- The schedules include a base rate and fringe rate
- The base rate is typically paid directly to the employee
- The fringe rate is used to purchase bona fide benefits, including the SUB Plan, on behalf of the employee
Supplemental Unemployment Benefit Plan
- ARROW SUB Plan uses excess fringe dollars to pay employees for short work periods
- Employers deposit excess fringe dollars to the ARROW SUB Plan. That money is held in a trust account and paid out to employees when they miss work for any number of reasons
- ARROW SUB Plan is part of an employee’s compensation package provided for working prevailing wage jobs. Other benefits can include health insurance and retirement plans
- Unlike a 401(k) or other retirement plans, employees can receive payouts from this plan without incurring IRS penalties
- SUB Plan is sponsored by ARCHER JORDAN and administered by Contractors Trust
Benefits of Providing a SUB Plan to Your Employees
- By setting the Fringe Benefits “aside” and into the SUB Plan, the employer saves on matching payroll taxes. Worker’s compensation and general liability costs may also be reduced
- By reducing these costs, you have the ability to win more jobs
- SUB Plan is a bonafide Fringe Benefit Plan as recognized by the IRS and DOL
