The Federated Employers Trust (FET) operates a Retention Fund whereby a portion of funds relating to a constriction contract is held in safe custody until such time as certain milestones of the project are completed. Milestones occur either periodically throughout the duration of the contract (i.e. stage of completion) or once-off at the end of the project.
Key aspects of this product are:
– The Retention Fund holds retention monies for a construction project on behalf of the project principle, whilst providing security to
the agent that the funds will be paid upon project completion
– A retention is held as an alternative to the agent using a performance guarantee
– The product can also be used to hold deposits in a similar way to an escrow account
As the funds are kept in safe custody within the Retention Fund, interest is earned by clients on the retention fund balance.
This product has been in existence for several years and managed within the FEM Finance team structure, through a software tool that was developed internally. Over the years, FET has built strong relationships with its clients, through its quality service.
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