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EMPLOYEE BENEFITS
 12 Months Ended
Dec. 29, 2013
EMPLOYEE BENEFITS  
EMPLOYEE BENEFITS

7.    EMPLOYEE BENEFITS

We have a qualified defined benefit pension plan ("Pension Plan") covering substantially all of our employees who began their employment prior to March 31, 2009. Effective March 31, 2009, the Pension Plan was frozen such that no new participants may enter the Pension Plan and no further benefits will accrue. However, years of service continue to count toward early retirement calculations and vesting of benefits previously earned.

We also have a limited number of supplemental retirement plans to provide key employees hired prior to March 31, 2009, with additional retirement benefits. These plans are funded on a pay-as-you-go basis and the accrued pension obligation is largely included in other long-term obligations. We paid $8.3 million in fiscal year 2013, $8.2 million in fiscal year 2012 and $7.4 million in fiscal year 2011 for these plans. We also provide or subsidize certain life insurance benefits for employees.

The following tables provide reconciliations of the pension and post-retirement benefit plans' benefit obligations, fair value of assets and funded status as of December 29, 2013, and December 30, 2012:

 
   Pension Benefits   Post-retirement Benefits  
(in thousands)
   2013   2012   2013   2012  

Change in Benefit Obligation

                          

Benefit obligation, beginning of year

   $ 2,073,218   $ 1,763,859   $ 15,932   $ 27,474  

Service cost

     5,545     5,540     —     —  

Interest cost

     84,596     91,898     497     946  

Plan participants' contributions

     —     —     586     817  

Actuarial (gain)/loss

     (214,353 )   305,952     (754 )   (2,400 )

Gross benefits paid

     (94,253 )   (89,213 )   (3,289 )   (3,285 )

Plan amendment

     —     —     (386 )   (7,620 )

Administrative expenses

     (5,432 )   (4,818 )   —     —  
                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Benefit obligation, end of year

   $ 1,849,321   $ 2,073,218   $ 12,586   $ 15,932  
                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
                   


 

 
   Pension Benefits   Post-retirement Benefits  
(in thousands)
   2013   2012   2013   2012  

Change in Plan Assets

                          

Fair value of plan assets, beginning of year

   $ 1,358,877   $ 1,233,305   $ —   $ —  

Actual return on plan assets

     157,614     171,481     —     —  

Employer contribution

     15,889     48,122     2,703     2,468  

Plan participants' contributions

     —     —     586     817  

Gross benefits paid

     (94,253 )   (89,213 )   (3,289 )   (3,285 )

Administrative expenses

     (5,432 )   (4,818 )   —     —  
                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Fair value of plan assets, end of year

   $ 1,432,695   $ 1,358,877   $ —   $ —  
                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
                   


 

 
   Pension Benefits   Post-retirement Benefits  
(in thousands)
   2013   2012   2013   2012  

Funded Status

                          

Fair value of plan assets

   $ 1,432,695   $ 1,358,877   $ —   $ —  

Benefit obligations

     (1,849,321 )   (2,073,218 )   (12,586 )   (15,932 )
                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Funded status and amount recognized, end of year

   $ (416,626 ) $ (714,341 ) $ (12,586 ) $ (15,932 )
                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
                   

Amounts recognized in the consolidated balance sheets at December 29, 2013, and December 30, 2012, consists of:

 
   Pension Benefits   Post-retirement Benefits  
(in thousands)
   2013   2012   2013   2012  

Current liability

   $ (33,418 ) $ (15,830 ) $ (1,585 ) $ (1,859 )

Noncurrent liability

     (383,208 )   (698,511 )   (11,001 )   (14,073 )
                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

 

   $ (416,626 ) $ (714,341 ) $ (12,586 ) $ (15,932 )
                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
                   

Amounts recognized in accumulated other comprehensive income for the years ended December 29, 2013, and December 30, 2012, consist of:

 
   Pension Benefits   Post-retirement Benefits  
(in thousands)
   2013   2012   2013   2012  

Net actuarial loss/(gain)

   $ 518,914   $ 815,385   $ (11,041 ) $ (11,380 )

Prior service cost/(credit)

     12     26     (13,436 )   (14,952 )
                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

 

   $ 518,926   $ 815,411   $ (24,477 ) $ (26,332 )
                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
                   

The elements of retirement and post-retirement costs are as follows:

 
   Years Ended  
(in thousands)
   December 29,
2013		   December 30,
2012		   December 25,
2011		  

Pension plans:

                    

Service Cost

   $ 5,545   $ 5,540   $ 5,600  

Interest Cost

     84,596     91,898     92,961  

Expected return on plan assets

     (101,053 )   (107,760 )   (104,251 )

Prior service cost amortization

     14     14     14  

Actuarial loss

     25,557     12,687     6,726  
               
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Net pension expense

     14,659     2,379     1,050  

Net post-retirement benefit credit

     (2,497 )   (995 )   (234 )

Deferred compensation plan credit

     —     —     (71 )
               
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Net retirement expenses

   $ 12,162   $ 1,384   $ 745  
               
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
               

Our discount rate was determined by matching a portfolio of long-term, non-callable, high quality bonds to the plans' projected cash flows.

Weighted average assumptions used for valuing benefit obligations were:

 
   Pension Benefit
Obligations		   Post-retirement
Obligations		  
 
   2013   2012   2013   2012  

Discount rate

     5.01%     4.17%     4.36%     3.39%
  

Weighted average assumptions used in calculating expense:

 
   Pension Benefit Expense   Post-retirement Expense  
 
   December 29,
2013		   December 30,
2012		   December 25,
2011		   December 29,
2013		   December 30,
2012		   December 25,
2011		  

Expected long-term return on plan assets

     8.00%     8.25%     8.25%     N/A   N/A     N/A  

Discount rate

     4.17%     5.31%     5.90%     3.39%   4.26%/3.31%  (1)     4.84%
  
  • (1)
    4.26% for January 2012 to September 2012; 3.31% for October 2012 to December 2012 due to plan change.

For the post-retirement plans, the medical cost trend rates are expected to decline from 7.0% in 2013 to 5.0% by the year 2018. As of December 29, 2013, a 1% increase in the assumed health care cost trend rate would increase the benefit obligation by $0.5 million and a 1% decrease in the assumed health care cost trend rate would decrease the benefit obligation by $0.5 million. As of December 30, 2012, a 1% increase in the assumed health care cost trend rate would increase the benefit obligation by $0.6 million and a 1% decrease in the assumed health care cost trend rate would decrease the benefit obligation by $0.6 million.

Contributions and Cash Flows

In January 2014, we contributed $25 million of cash to the Pension Plan, which we expect will satisfy all of our required contributions in fiscal year 2014. We do not expect to make any additional contributions to the Pension Plan during fiscal year 2014.

In fiscal year 2013, we contributed $7.6 million of cash to the Pension Plan. In fiscal year 2012, we contributed $40.0 million of cash to the Pension Plan.

In January 2011, we contributed owned real property from seven locations to our Pension Plan. The Pension Plan obtained independent appraisals of the property and, based on these appraisals, recorded the contribution at the fair value of $49.7 million. We entered into leases for the seven contributed properties for 10 years. The properties are managed on behalf of the Pension Plan by an independent fiduciary. In May 2011, we used proceeds from the sale of our property in Miami (see Note 3) to contribute $163.0 million to the Pension Plan.

The contribution and leaseback of the properties was treated as a financing transaction and, accordingly, we continue to depreciate the carrying value of the properties in our financial statements. No gain or loss has been recognized on the contribution. Our pension obligation was reduced by $49.7 million and a long-term and short-term financing obligation was recorded on the date of the contribution. The financing obligation is reduced by a portion of the lease payments made to the Pension Plan each month. The balance of this obligation at December 29, 2013, was $44.5 million.

Expected benefit payments to retirees under our retirement and post-retirement plans over the next 10 years are summarized below:

(in thousands)
   Retirement
Plans (1)		   Post-retirement
Plans		  

2014

   $ 94,367   $ 1,584  

2015

     97,659     1,316  

2016

     100,459     1,259  

2017

     104,887     1,203  

2018

     107,832     1,143  
2019-2023     592,450     4,681  
           
​ ​ ​ ​ ​ ​ ​ ​

Total

   $ 1,097,654   $ 11,186  
           
​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​
           
  • (1)
    Largely to be paid from the qualified defined benefit pension plan

Pension Plan Assets

Our investment policies are designed to maximize Pension Plan returns within reasonable and prudent levels of risk, with an investment horizon of greater than 10 years so that interim investment returns and fluctuations are viewed with appropriate perspective. The policy also aims to maintain sufficient liquid assets to provide for the payment of retirement benefits and plan expenses, hence, small portions of the equity and debt investments are held in marketable mutual funds.

Our policy seeks to provide an appropriate level of diversification of assets, as reflected in its target allocations, as well as limits placed on concentrations of equities in specific sectors or industries. It uses a mix of active managers and passive index funds and a mix of separate accounts, mutual funds, common collective trusts and other investment vehicles.

Our assumed long-term return on assets was developed using a weighted average return based upon the Pension Plan's portfolio of assets and expected returns for each asset class, taking into account projected inflation, interest rates and market returns. The assumed return was also reviewed in light of historical and recent returns in total and by asset class.

As of December 29, 2013 and December 30, 2012, the target allocations for the Pension Plan assets were 60% equity securities, 28% debt securities, 7% real estate securities and 5% commodities.

The table below summarizes the Pension Plan's financial instruments that are carried at fair value on a recurring basis by the fair value hierarchy levels discussed above, as of the year ended December 29, 2013:

 
   2013
  
 
   Plan Assets  
(in thousands)
   Level 1   Level 2   Level 3   Total  

Cash and cash equivalents

   $ 844   $ —   $ —   $ 844  

Mutual fund

     273,450     —     —     273,450  

Corporate debt instruments

     —     105     —     105  

U.S. Government securities

     —     112,530     —     112,530  

Common collective trusts

     —     980,317     —     980,317  

Real estate

     —     —     52,265     52,265  

Other

     —     —     7,167     7,167  
                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total

   $ 274,294   $ 1,092,952   $ 59,432     1,426,678  
                     
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
                     

Pending trades

                       6,017  
                         
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

 

                     $ 1,432,695  
                         
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
                         

The table below summarizes changes in the fair value of the Pension Plan's Level 3 investment assets held for the year ended December 29, 2013:

(in thousands)
   Real Estate   Private Equity   Total  

Beginning Balance, December 30, 2012

   $ 51,579   $ 6,408   $ 57,987  

Purchases, issuances, sales, settlements

     —     —     —  

Realized gains

     4,817           4,817  

Transfer in or out of level 3

     (4,817 )   (167 )   (4,984 )

Unrealized gains

     686     926     1,612  
               
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Ending Balance, December 29, 2013

   $ 52,265   $ 7,167   $ 59,432  
               
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
               

The table below summarizes the Pension Plan's financial instruments that are carried at fair value on a recurring basis by the fair value hierarchy levels discussed above, as of the year ended December 30, 2012:

 
   2012
Plan Assets		  
(in thousands)
   Level 1   Level 2   Level 3   Total  

Cash and cash equivalents

   $ 1,161   $ —   $ —   $ 1,161  

Mutual fund

     257,398     —     —     257,398  

Corporate debt instruments

     —     98     —     98  

U.S. Government securities

     —     107,337     —     107,337  

Common collective trusts

     —     928,730     —     928,730  

Real estate

     —     —     51,579     51,579  

Other

     —     —     6,408     6,408  
                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total

   $ 258,559   $ 1,036,165   $ 57,987     1,352,711  
                     
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
                     

Pending trades

                       6,166  
                         
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

 

                     $ 1,358,877  
                         
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
                         

The table below summarizes changes in the fair value of the Pension Plan's Level 3 investment assets held for the year ended December 30, 2012:

(in thousands)
   Real Estate   Private Equity   Total  

Beginning Balance, December 25, 2011

   $ 50,530   $ 8,899   $ 59,429  

Purchases, issuances, sales, settlements

     —     —     —  

Realized gains

     3,747     27     3,774  

Transfer in or out of level 3

     (3,747 )   (3,820 )   (7,567 )

Unrealized gains

     1,049     1,302     2,351  
               
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Ending Balance, December 30, 2012

   $ 51,579   $ 6,408   $ 57,987  
               
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
               

Cash and cash equivalents.    The carrying value of these items approximates fair value.

Mutual funds.    These investments are publicly traded investments, which are valued using the Net Asset Value (NAV). The NAV of the mutual funds is a quoted price in an active market. The NAV is determined once a day after the closing of the exchange based upon the underlying assets in the fund, less the fund's liabilities, expressed on a per-share basis.

Corporate debt instruments.    The fair value of corporate debt instruments is based on yields currently available on comparable securities of issuers with similar credit ratings. When quoted prices are not available for identical or similar debt instruments, the fair value is based upon an industry valuation model, which maximizes observable inputs.

U.S. Government securities.    U.S. government securities primarily consist of investments in U.S. Treasury Bonds, Indexed Linked Bonds and Treasury Inflation Protected Securities. The fair value of U.S. government securities is based on quoted market prices when available or is based on yields currently available on comparable securities or on an industry valuation model, which maximizes observable inputs.

Common collective trusts.    These investments are valued based on the NAV of the underlying investments and are provided by the fund issuers. NAV for these funds represent the quoted price in a non-market environment. There are no restrictions on participants' ability to withdraw funds from the common collective trusts.

Real estate.    On January 14, 2011, we contributed Company-owned real property from seven locations to our Pension Plan. The Pension Plan obtained independent appraisals of the property, and based on these appraisals, the Pension Plan recorded the contribution at fair value on January 14, 2011. The properties are leased by us for our newspaper operations. The properties are managed on behalf of the Pension Plan by an independent fiduciary, and the terms of the leases between us and the Pension Plan were negotiated with the fiduciary. The property is valued by independent appraisals conducted under the direction of the independent fiduciary.

Other.    Other includes:

    • Private equity fund.     Private equity funds represent investments in limited partnerships, which invest in start-up or other private companies. Fair value is estimated based on valuations of comparable public companies, recent sales of comparable private and public companies, and discounted cash flow analysis of portfolio companies and is included as a Level 3 investment in the table above.

401(k) Plan

We have separate deferred compensation plans ("401(k) plan") for employees, which enable qualified employees to voluntarily defer compensation. On March 31, 2009, we temporarily suspended our matching contribution to the 401(k) plan. The 401(k) plan, as amended, includes a Company match (once reinstated) and a supplemental contribution that is tied to our performance (as defined in the plan).