MODESTO, Calif. -- E & J Gallo Winery's union members approved a four-year contract that gives them a new 401(k) plan, said Gallo spokesman Jock Soper.
The new contract was approved late last month by 88.8% of the members of the United Food and Commercial Workers Union.
The union's new 401(k) plan will be separate from, but similar to, a 6-year-old $300 million 401(k) plan for salaried employees, said Bob Tubman, Gallo's investment manager. Union members already have a multi- employer defined benefit plan, the size of which could not be learned.
Both plans will be unbundled, with the same four investment options and without a company match, Mr. Tubman said.
Northern Trust Co., Chicago, will be trustee; record keeping will be done in-house.
Oppenheimer Capital, New York; Federated Investors, Pittsburgh; The Vanguard Group Inc., Malvern, Pa.; and Aeltus Investment Management Inc., Hartford, Conn., will manage the options, Mr. Tubman said. He wouldn't list the options or give the asset allocation.
A plan description obtained by Pensions & Investments lists a balanced fund managed by Oppenheimer, a government bond fund managed by Federated, Vanguard's Standard & Poor's 500 index fund and a stable value fund managed by Aeltus.
"The 401(k) plan is highly desirable," said George J. Orlando, UFCW international vice president and division director for the union.
"It's a nice opportunity for people to put some money away."
The union bargained for the 401(k) plan at its members' request, explained Harry Priest, international representative for UFCW's distillery wine division. Because they are employee directed and provide more frequent account information, 401(k)s often are more visible retirement plans than traditional defined benefit plans.
In the last few years, the union has asked for a 401(k) plan to be included in the union contract, Mr. Priest said. Of the 12 contracts he has negotiated for union members this year, Gallo was the only winery to include a 401(k).
But he said he will request a 401(k) plan to be added only if there is an existing multiemployer plan. "Individuals are not educated enough to know what is going on with their investments," Mr. Priest said.