The Markets February 17, 2009

Slumping Convention Business Cuts into 401(k) Match

Atlanta Convention&Visitors Bureau announced Friday it will cut contributions to employee 401(k) and profit-sharing plans for the year to make up for an expected $600,000 shortfall of revenue caused by slumping hotel occupancy.
Reported by

No job cuts or furloughs are being made at this time, ACVB President and CEO William Pate said, but personnel cuts are possible if the economy and hotel/motel tax collections continue to decline, according to the Atlanta Business Chronicle.

Pate said the bureau expects to save $400,000 this year by ending its matching contributions to employee retirement and profit-sharing plans, according to the report. Pate informed ACVB’s 74 employees of the changes in a Friday afternoon staff meeting, according to the Atlanta Journal-Constitution.

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The bureau, which is charged with selling Atlanta globally as a business and leisure travel destination, said the cuts will not affect its programming capacity. Hospitality is an $11.4 billion economy driver for Atlanta, responsible for about 230,000 jobs.

The 401(k) match cut is the latest in announcements from many companies (see “Another Casino Operator Craps out on Match“).

The Markets February 17, 2009

Another Casino Operator Craps out on Match

Harrah's Entertainment last week revealed that the company will suspend matching employees' 401(k) contributions.
Reported by

The company also confirmed that it was cutting managers’ salaries in an effort to help the company navigate the economic downturn, according to the Casino City Times. In making the move, Harrah’s joins Wynn Resorts Ltd. (see “Wynn Resorts Calls Off 401(k) Match’), Mohegan Sun (see “Mohegan Sun Casino Stops Match’), and Station Casinos (see “More Companies Go Match-less“) in cutting back on their match commitments.

Las Vegas visitation declined 10.9% in December and 4.4% last year, according to the report, citing data from the Las Vegas Convention and Visitors Authority.

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Other Decisions

The firm is the latest of several to suspend their 2009 matching contributions, including Sears (see “Sears Suspends 401(k) Match, Drops 1,100 Jobs’), TheDenver Post (see “Denver Post Latest to Suspend 401(k) Match’), Unisys (see “Unisys Cuts 401(k) Match’), Starbucks (see “Starbucks 401(k) Match Goes Discretionary’), Motorola (see “Motorola Freezes Pension, Suspends 401(k) Match’), Eddie Bauer (see “Eddie Bauer Suspends Match’), 7-Eleven (see “7-Eleven Latest to Suspend 401(k) Match’), and FedEx (see “FedEx Suspends Match, Cuts Pay’).

However most plan sponsors responding to a recent PLANSPONSOR survey said they had no plans to change their 401(k) match program (see “SURVEY SAYS: What Are Your Plans for Your Match?’)—a sentiment echoed in a recent employer survey by Mercer (see “Most Employers Don’t Plan to Reduce Contributions’). And Dollar Thrifty Automotive Group, Inc., recently reinstated its match after a suspension (see “Dollar Says Reinstating Match “Right Thing to Do’’), as did Louisville, Kentucky-based Republic Bank (see “Louisville Bank Ups 401(k) Match“).

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