Pension and Postretirement Benefits

As a result of the Enterprise News Media, LLC (in 2005), Copley Press, Inc. (in 2007), and Times Publishing Company acquisitions (in 2016), the Company maintains two pension and several postretirement medical and life insurance plans which cover certain employees. The Company uses the accrued benefit actuarial method and best estimate assumptions to determine pension costs, liabilities and other pension information for defined benefit plans.

The Enterprise News Media, LLC pension plan was amended to freeze all future benefit accruals as of December 31, 2008, except for a select group of union employees whose benefits were frozen during 2009. Also, during 2008, the medical and life insurance benefits were frozen, and the plan was amended to limit future benefits to a select group of active employees under the Enterprise News Media, LLC postretirement medical and life insurance plan. Benefits under the postretirement medical and life insurance plan assumed with the Copley Press, Inc. acquisition are only available to Brush-Moore employees hired before January 1, 1976. The Times Publishing Company pension plan was frozen prior to the acquisition.

The following table provides a reconciliation of benefit obligations, plan assets and funded status, along with the related amounts in the consolidated balance sheets of the Company’s pension and postretirement medical and life insurance plans as of December 25, 2016 and December 27, 2015:



	Pension						Postretirement
	Year Ended December 25, 2016			Year Ended December 27, 2015			Year Ended December 25, 2016			Year Ended December 27, 2015
Change in projected benefit obligation:
Benefit obligation at beginning of period	$	26,161		$	28,297		$	5,630		$	6,547
Benefit obligation assumed during the period	52,312			—			—			—
Service cost	300			300			14			19
Interest cost	3,255			1,149			213			223
Actuarial loss (gain)	1,267			(1,949		)	(555		)	(922		)
Benefits and expenses paid	(4,972		)	(1,636		)	(306		)	(247		)
Participant contributions	—			—			33			24
Employer implicit subsidy fulfilled	—			—			(19		)	(14		)
Projected benefit obligation at end of period	$	78,323		$	26,161		$	5,010		$	5,630
Change in plan assets:
Fair value of plan assets at beginning of period	$	20,560		$	21,304		$	—		$	—
Fair value of plan assets assumed during the period	36,012			—			—			—
Actual return on plan assets	4,069			(8		)	—			—
Employer contributions	1,597			900			—			—
Benefits paid	(4,666		)	(1,471		)	—			—
Expenses paid	(306		)	(165		)	—			—
Fair value of plan assets at end of period	$	57,266		$	20,560		$	—		$	—
Reconciliation of funded status:
Benefit obligation at end of period	$	(78,323	)	$	(26,161	)	$	(5,010	)	$	(5,630	)
Fair value of assets at end of period	57,266			20,560			—			—
Funded status	(21,057		)	(5,601		)	(5,010		)	(5,630		)
Unrecognized actuarial loss (gain)	4,803			3,526			(826		)	(368		)
Net accrued benefit cost	$	(16,254	)	$	(2,075	)	$	(5,836	)	$	(5,998	)
Balance sheet presentation:
Accrued liabilities	$	—		$	—		$	358		$	417
Pension and other postretirement benefit obligations	21,057			5,601			4,652			5,213
Accumulated other comprehensive (loss) income	(4,803		)	(3,526		)	826			368
Net accrued benefit cost	$	16,254		$	2,075		$	5,836		$	5,998
Comparison of obligations to plan assets:
Projected benefit obligation	$	78,323		$	26,161		$	5,010		$	5,630
Accumulated benefit obligation	78,323			26,161			5,010			5,630
Fair value of plan assets	57,266			20,560			—			—

The following table provides the components of net periodic benefit cost and other changes in plan assets recognized in other comprehensive (loss) income of the Company’s pension and postretirement medical and life insurance plans for the years ended December 25, 2016, December 27, 2015, and December 28, 2014:



	Pension									Postretirement
	Year Ended December 25, 2016			Year Ended December 27, 2015			Year Ended December 28, 2014			Year Ended December 25, 2016			Year Ended December 27, 2015			Year Ended December 28, 2014
Components of net periodic benefit cost:
Service cost	$	300		$	300		$	300		$	14		$	19		$	21
Interest cost	3,255			1,149			1,191			213			223			245
Expected return on plan assets	(4,174		)	(1,636		)	(1,624		)	—			—			—
Amortization of unrecognized loss	94			84			—			(97		)	—			—
Net periodic benefit cost	$	(525	)	$	(103	)	$	(133	)	$	130		$	242		$	266
Other changes in plan assets and benefit obligations recognized in other comprehensive income:
Net actuarial loss (gain)	$	1,371		$	(305	)	$	4,549		$	(555	)	$	(922	)	$	378
Amortization of net actuarial (loss) gain	(94		)	(84		)	—			97			—			—
Total recognized in other comprehensive income (loss)	$	1,277		$	(389	)	$	4,549		$	(458	)	$	(922	)	$	378

The following assumptions were used in connection with the Company’s actuarial valuation of its defined benefit pension and postretirement plans obligation:



	Pension				Postretirement
	December 25, 2016		December 27, 2015		December 25, 2016		December 27, 2015
Weighted average discount rate	4.1	%	4.7	%	3.9	%	4.3	%
Rate of increase in future compensation levels	—		—		—		—
Expected return on assets	7.6	%	7.75	%	—		—
Current year medical trend	—		—		6.9	%	7.2	%
Ultimate year medical trend	—		—		4.5	%	4.5	%
Year of ultimate trend	—		—		2025		2026

The following assumptions were used to calculate the net periodic benefit cost for the Company’s defined benefit pension and postretirement plans:



	Pension						Postretirement
	Year Ended December 25, 2016		Year Ended December 27, 2015		Year Ended December 28, 2014		Year Ended December 25, 2016		Year Ended December 27, 2015		Year Ended December 28, 2014
Weighted average discount rate	3.9	%	4.2	%	5.0	%	4.3	%	3.8	%	4.5	%
Rate of increase in future compensation levels	—		—		—		—		—		—
Expected return on assets	7.6	%	7.75	%	8.0	%	—		—		—
Current year medical trend	—		—		—		7.2	%	7.3	%	7.8	%
Ultimate year medical trend	—		—		—		4.5	%	4.8	%	4.8	%
Year of ultimate trend	—		—		—		2026		2025		2025

To determine the expected long-term rate of return on pension plan assets, the Company considers the current and expected asset allocations, as well as historical and expected returns on various categories of plan assets, input from the actuaries and investment consultants, and long-term inflation assumptions. The expected allocation of pension plan assets is based on a diversified portfolio consisting of domestic and international equity securities and fixed income securities. This expected return is then applied to the fair value of plan assets. The Company amortizes experience gains and losses, including the effects of changes in actuarial assumptions and plan provisions over a period equal to the average future service of plan participants or over the average remaining life expectancy of inactive participants.



	Postretirement
	2016			2015
Effect of 1% increase in health care cost trend rates
Accumulated postretirement benefit obligation	$	5,366		$	6,084
Dollar change	$	356		$	454
Percent change	7.1		%	8.1		%
Effect of 1% decrease in health care cost trend rates
Accumulated postretirement benefit obligation	$	4,708		$	5,249
Dollar change	$	(302	)	$	(381	)
Percent change	(6.0		)%	(6.8		)%

Fair Value of the majority of plan assets is measured on a recurring basis using quoted market prices in active markets for identical assets, Level 1 input. The pension plan’s assets by asset category are as follows:



	Year Ended December 25, 2016				Year Ended December 27, 2015
	Dollar		Percent		Dollar		Percent
Equity mutual funds	$	35,319	62	%	$	14,138	69	%
Fixed income mutual funds	14,449		25	%	5,215		25	%
Cash and cash equivalents	824		1	%	789		4	%
Other	6,674		12	%	418		2	%
Total	$	57,266	100	%	$	20,560	100	%

The plan fiduciaries of the pension plan set investment policies and strategies for the pension trusts. Objectives include preserving the funded status of the plan and balancing risk against return.

The general target allocation for the George W. Prescott Publishing Company LLC Pension Plan is 70% in equity funds and 30% in fixed income funds for the plan’s investments. To accomplish this goal, each plan’s assets are actively managed by outside investment managers with the objective of optimizing long-term return while maintaining a high standard of portfolio quality and proper diversification. The Company monitors the maturities of fixed income securities so that there is sufficient liquidity to meet current benefit payment obligations. The George W. Prescott Publishing Company LLC Pension Plan had an accumulated benefit obligation of $26,888 and $26,161 and a plan asset fair value of $20,326 and $20,560 at December 25, 2016 and December 27, 2015, respectively.

The general target allocation for the Times Publishing Company Pension Plan is 52% in equity funds, 26% in fixed income securities, 20% in alternative securities and 2% in cash or money market funds. The Times Publishing Company Pension Plan, assumed in 2016, had an accumulated benefit obligation of $51,435 and an asset fair value of $36,940 at December 25, 2016.

The following benefit payments, which reflect expected future services, as appropriate, are expected to be paid as follows:



	Pension		Postretirement
2017	$	4,619	$	365
2018	4,653		382
2019	4,686		364
2020	4,713		356
2021	4,718		361
2022-2026	23,697		1,618
Employer contribution expected to be paid during the year ending December 31, 2017	$	1,834	$	365

The postretirement plans are not funded.

The aggregate amount of net actuarial loss related to the Company’s pension and postretirement plans recognized in other comprehensive (loss) income as of December 25, 2016 was $3,977 of which $35 is expected to be amortized in 2017.

Multiemployer Plans

The Company is a participant in three multi-employer pension plans covering certain employees with Collective Bargaining Agreements (“CBAs”) in Ohio, Massachusetts and Illinois. The risks of participating in these multi-employer plans are different from single-employer plans in the following aspects:


•	The Company plays no part in the management of plan investments or any other aspect of plan administration.


•	Assets contributed to the multi-employer plan by one employer may be used to provide benefits to employees of other participating employers.


•	If a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers.


•	If the Company chooses to stop participating in some of its multi-employer plans, the Company may be required to pay those plans an amount based on the unfunded status of the plan, referred to as withdrawal liability.

The Company’s participation in these plans for the year ended December 25, 2016, is outlined in the table below. The “EIN/Pension Plan Number” column provides the Employee Identification Number (EIN) and the three-digit plan number. Unless otherwise noted, the two most recent Pension Protection Act (PPA) zone statuses available are for the plans for the years ended 2016 and 2015, respectively. The zone status is based on information that the company received from the plan and is certified by the plan’s actuary. Among other factors, plans in the red zone are generally less than 65% funded; plans in the orange zone are both a) less than 80% funded and b) have an accumulated/expected funding deficiency in any of the next six plan years, net of any amortization extensions; plans in the yellow zone meet either one of the criteria mentioned in the orange zone; and plans in the green zone are at least 80% funded. The “FIP/RP Status Pending/Implemented” column indicates plans for which a financial improvement plan (FIP) or a rehabilitation plan (RP) is either pending or has been implemented. The last column lists the expiration date(s) of the collective-bargaining agreement(s) to which the plans are subject.

The Company makes all required contributions to these plans as determined under the respective CBAs. For each of the plans listed below, the Company’s contribution represented less than 5% of total contributions to the plan.



	EIN Number/	Zone Status		FIP/RP Status Pending/	Contributions (in thousands)						Surcharge	Expiration
Pension Plan Name	Plan Number	2016	2015	Implemented	2016		2015		2014		Imposed	Dates of CBAs
CWA/ITU Negotiated Pension Plan	13-6212879/001	Critical and Declining	Critical	Implemented	$	11	$	12	$	13	No	May 4, 2017
GCIU—Employer Retirement Benefit Plan ⁽¹⁾	91-6024903/001	Critical and Declining	Critical	Implemented	89		99		102		No	Under negotiation
The Newspaper Guild International Pension Plan ⁽¹⁾	52-1082662/001	Critical and Declining	Critical	Implemented	40		38		39		No	July 1, 2018 and November 14, 2018
Total					$	140	$	149	$	154


(1)	This plan has elected to utilize special amortization provisions provided under the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010.

The Company assumed two multi-employer plan withdrawal liabilities in one of the 2016 Acquisitions. The liability at the acquisition date was estimated to be approximately $1,240, excluding interest. The penalties are payable over twenty years. The balance as of December 25, 2016 is approximately $1,194.