Dec. 02, 2008 Copyright © Las Vegas Review-Journal
Station suspends 401(k) matches
Casino company first in local gaming sector to cut contributions
By ARNOLD M. KNIGHTLY LAS VEGAS REVIEW-JOURNAL
Some Las Vegas companies are beginning to join a growing national trend in trying to cut operating expenses.
Station Casinos announced last week that it was suspending its matching contributions for its employees' 401(k) retirement plans.
No other local gaming company indicated that it was changing its 401(k) policies, although recent surveys have found that more companies nationally are slashing or canceling their 401(k) matches because of the economic downturn.
General Motors Corp. and Frontier Airlines Holdings are two major companies that have already suspended contributions this year.
MGM Mirage terminated its supplemental executive retirement plan in November and has stopped matching funds for its employees' deferred compensation program.
MGM Mirage spokesman Alan Feldman, however, said Monday the company has not discussed changing its 401(k) plan.
MGM Mirage's executive plan cost the company $7 million in 2007 and 2006, while the deferred compensation program, which will continue without the match, cost $1 million in 2007 and $2 million in 2005 and 2006, according to a year-end federal filing in February.
The gaming giant, which has reduced its work force by 3,200 this year, mostly along the Strip, announced this year that annual bonuses were canceled throughout the company.
Harrah's Entertainment, which operates eight casinos on the Strip, said the company still contributes to its employee 401(k) program and has no plans to cut that benefit.
Las Vegas Sands Corp. spokesman Ron Reese said the company is "focused on maximizing efficiencies and reducing costs where appropriate," but wouldn't elaborate.
Boyd Gaming Corp. spokesman Rob Stillwell declined to comment when asked if employee benefits were being cut or bonuses canceled, saying the company doesn't discuss employee matters.
Wynn Resorts Ltd. did not respond to an inquiry by deadline.
Station Casinos said last week that the struggling economy has forced it to stop the 401(k) matches for its employees.
"We have always taken care of our team members when times are good," company spokeswoman Lori Nelson said. "In order to save jobs, we need them to share some of the burden in these unprecedented times."
The company said this year its executives were taking pay cuts, but on Friday it said executives would not be getting bonuses this year, either.
Station Casinos contributed $3.6 million in 2007 to the 401(k) plan, compared with $2.8 million in 2006, $2.2 million in 2005 and $2 million in 2004, according to the company's year-end filing in March with the Securities and Exchange Commission.
At many companies other than the nonunion Station Casinos and Las Vegas Sands, benefit reductions would have to be negotiated with various unions operating at the hotel-casinos.
D. Taylor, secretary-treasurer of Culinary Local 226, said none of the local gaming companies have approached the union about reducing retirement or employee benefits because of the economy.
Taylor, whose union represents 60,000 local workers, said he was "outraged that innocent workers who have been counting on 401(k) contributions have had it unilaterally pulled away from them by management."
The Culinary has worked unsuccessfully for years to organize Station Casinos, which now operates 18 casinos around Clark County.
"I feel very, very bad for those workers," Taylor said. "I think it's a very horrible precedent."
Station Casinos matches 50 percent of the first 4 percent of a participating employee's contribution, according to the gaming company's year-end report.
A letter dated Nov. 24 and signed by Chief Operating Officer Kevin Kelley began arriving in workers' mailboxes last week, informing the employees that the decision was "extremely difficult" but that the company is facing "unprecedented economic times."
"Much to our dismay, both Las Vegas and the nation as a whole are continuing to experience an extreme economic downturn," the letter begins. "As a member of the gaming industry, (Station Casinos) has not been exempt from the negative impact of that downturn."
