Foxwoods to offset raises with 401(k) match hiatus
Mashantucket - In going public with news of a 2.5 percent raise for nonunion employees, Foxwoods Resort Casino management failed to mention Friday that it will also suspend contributions to the 401(k) retirement accounts of both union and nonunion workers.
Michael Speller, president of Mashantucket Pequot Gaming Enterprises, which operates Foxwoods, including MGM Grand at Foxwoods, informed employees of the raises and of the one-year suspension of the 401(k) match in a memo last Thursday.
On Friday, Foxwoods provided The Day with a two-paragraph portion of the memo that only dealt with the raises. The Day obtained a copy of the entire, four-paragraph memo Monday.
"In order to partially offset some of the cost of implementing the wage increases, it will be necessary to suspend the 401(k) match for all hourly Team Members, beginning February 28, 2010," Speller said in the memo. "This match had already been suspended for our salaried Team Members in 2009.
"... While it is not easy to make these choices we believe that the implementation of a wage increase is an immediate benefit to our Team Members and at the current time is more meaningful."
Foxwoods matches up to 3 percent of the salary deferral made by each employee who chooses to participate in the 401(k) plan. Foxwoods officials could not say Monday how many employees participate. The number constantly fluctuates, they said.
"All employees utilizing 401(k) benefits are encouraged to continue their investment, and when the market improves within 12 months, we will re-instate the matching benefits for our hourly team members and their wage increase will remain in effect," a Foxwoods spokeswoman said Monday. " … The 401(k) reduction is a small fraction of the increased expense (of the raises) and Foxwoods is absorbing that cost."
Mohegan Sun, Foxwoods' neighboring competitor, suspended annual wage hikes and 401(k) matches as part of a cost-containment program adopted Feb. 1, 2009. It reinstated the pay increases this month.
The Mashantucket Pequot Tribe, which owns Foxwoods, has been negotiating with banks, bondholders and other lenders as it seeks to restructure more than $2 billion in debt.
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