Will Minnie and Mickey Mouse Move to a 401(k)?

July 26, 2010 (PLANSPONSOR.com) – With the company staring at a hike in pension and post-retirement medical costs of $270 in its current fiscal year, benefit issues have been a key battleground in the Walt Disney Co.’s latest round of union negotiations.

An Orlando Sentinel news report said the company has kicked off contract talks with the coalition of unions that represent half of the 58,000 workers at the Walt Disney World resort near Orlando.  The negotiations are expected to last at least until September, but the two sides won’t begin discussing the big-ticket financial issues such as wages and health insurance until late August.

According to the Sentinel report, Florida’s still weakened economy and the ballooning benefit costs could well spur the company to more aggressively pursue proposals it has made in past rounds of negotiations regarding pension and benefit changes, and the unions to fight the suggestions in a like manner. For example, Disney has tried before to replace pensions for new hires with 401(k) accounts.

“I’m tired of saying it, you’re probably tired of hearing it, [but] we have a big pension burden in that business,” Disney Co. Chief Financial Officer Jay Rasulo told analysts at a conference in New York last month, the Sentinel said.

According to the news report, Disney has typically kept its pension-limiting efforts to the broad “main table” negotiations with the overall union council. This summer, however, Disney managers have been bringing up pension changes even in smaller bargaining sessions with individual worker groups.

The Sentinel said union leaders complain their members are more wary than ever of 401(k) s, after the recent economic downturn. A 401(k) is “good for somebody making enough to save. But when you make between $8 and $15 per hour, there’s not a whole lot to save,” said Ed Chambers, president of United Food and Commercial Workers Local 1625, which represents merchandise and banquet workers, as well as florists.