Retirement plans

The company and its subsidiaries have various retirement plans, including plans established under collective bargaining agreements. The company’s principal retirement plan is the Gannett Retirement Plan (GRP). The disclosure tables below also include the assets and obligations of the Gannett Supplemental Retirement Plan (SERP), the Newsquest Pension Scheme in the U.K., and the Newspaper Guild of Detroit Pension Plan. The company uses a Dec. 31 measurement date for its retirement plans.

During 2008, substantially all of the participants in the GRP and the SERP had their benefits under these plans frozen. Amendments were made to the existing Gannett 401(k) Savings Plan (401(k) Plan) and the Gannett Deferred Compensation Plan (DCP). Most participants whose benefits were frozen under the GRP and, if applicable, the SERP received higher matching contributions under the 401(k) Plan. The matching contribution rate generally increased from 50% of the first 6% of compensation that an employee elects to contribute to the plan to 100% of the first 5% of contributed compensation. The company also makes additional employer contributions to the 401(k) Plan on behalf of certain long-service employees. The DCP was amended to provide for Gannett contributions on behalf of certain employees whose benefits under the 401(k) Plan are capped by IRS rules. Participants whose benefits were frozen will have their benefits periodically increased by a cost of living adjustment until benefits commence.

In October 2010, after discussion with its pension plan trustees and employees, the company decided to freeze the Newsquest defined benefit plan, effective March 31, 2011. The plan freeze was made to reduce pension expense and funding volatility and was part of a package of measures to address the plan’s deficit. The company recognized a pre-tax curtailment gain of $3.3 million in 2010 in connection with this closure.

The company’s pension costs, which include costs for its qualified and non-qualified plans, are presented in the following table:



In thousands of dollars
	2012			2011			2010
Service cost—benefits earned during the period	$	7,545		$	7,833		$	14,829
Interest cost on benefit obligation	155,376			171,339			176,738
Expected return on plan assets	(189,863		)	(211,659		)	(191,614		)
Amortization of prior service costs	7,689			7,580			6,731
Amortization of actuarial loss	53,429			37,901			46,870
Pension expense for company-sponsored retirement plans	34,176			12,994			53,554
Curtailment gains	—			—			(3,840		)
Settlement and special termination benefit charge	7,946			1,068			—
Total pension cost	$	42,122		$	14,062		$	49,714

The following table provides a reconciliation of pension benefit obligations (on a projected benefit obligation measurement basis), plan assets and funded status of company-sponsored retirement plans, along with the related amounts that are recognized in the Consolidated Balance Sheets.



In thousands of dollars
	Dec. 30, 2012			Dec. 25, 2011
Change in benefit obligations
Benefit obligations at beginning of year	$	3,351,494		$	3,217,877
Service cost	7,545			7,833
Interest cost	155,376			171,339
Plan amendments	—			1,297
Plan participants’ contributions	7			3,885
Actuarial loss	300,525			182,789
Foreign currency translation	27,526			5,740
Gross benefits paid	(245,899		)	(240,334		)
Special termination benefit	—			1,068
Settlements	(23,489		)	—
Benefit obligations at end of year	$	3,573,085		$	3,351,494
Change in plan assets
Fair value of plan assets at beginning of year	$	2,408,768		$	2,588,728
Actual return on plan assets	254,225			(6,537		)
Plan participants’ contributions	7			3,885
Employer contributions	137,499			56,392
Gross benefits paid	(245,899		)	(240,334		)
Settlements	(23,489		)	—
Foreign currency translation	21,205			6,634
Fair value of plan assets at end of year	$	2,552,316		$	2,408,768
Funded status at end of year	$	(1,020,769	)	$	(942,726	)
Amounts recognized in Consolidated Balance Sheets
Accrued benefit cost—current	$	(13,444	)	$	(34,616	)
Accrued benefit cost—long-term	$	(1,007,325	)	$	(908,110	)

The funded status (on a projected benefit obligation basis) of the company’s principal retirement plans at Dec. 30, 2012, is as follows:



In thousands of dollars
	Fair Value of Plan Assets		Benefit Obligation		Funded Status
GRP	$	1,868,164	$	2,461,782	$	(593,618	)
SERP ^(a)	—		219,297		(219,297		)
Newsquest	606,174		798,078		(191,904		)
Newspaper Guild Plan	77,978		93,928		(15,950		)
Total	$	2,552,316	$	3,573,085	$	(1,020,769	)
^(a) the SERP is an unfunded, unsecured liability

For each of the company’s plans, both the accumulated benefit obligation and the projected benefit obligation exceeded the fair value of the plan assets. The accumulated benefit obligation for all defined benefit pension plans was $3.55 billion and $3.32 billion at Dec. 30, 2012 and Dec. 25, 2011, respectively.

Net actuarial losses recognized in accumulated other comprehensive loss were $1.72 billion as of Dec. 30, 2012 and $1.53 billion as of Dec. 25, 2011. Prior service cost recognized in accumulated other comprehensive loss was $61.3 million in 2012 and $69.0 million in 2011.

The actuarial loss and prior service cost amounts expected to be amortized from accumulated other comprehensive income (loss) into net periodic benefit cost in 2013 are $60.8 million and $7.6 million, respectively.

Other changes in plan assets and benefit obligations recognized in other comprehensive loss consist of the following:



In thousands of dollars
	2012
Current year actuarial loss	$	(236,163	)
Amortization of actuarial loss	53,429
Amortization of prior service costs	7,689
Actuarial gain due to settlement	7,946
Currency loss	(11,585		)
Total	$	(178,684	)

Pension costs: The following assumptions were used to determine net pension costs:



	2012	2011	2010
Discount rate	4.83%	5.49%	5.88%
Expected return on plan assets	8.25%	8.75%	8.75%
Rate of compensation increase	2.96%	2.95%	2.88%

The expected return on plan assets assumption was determined based on plan asset allocations, a review of historic capital market performance, historical plan asset performance and a forecast of expected future plan asset returns.

Benefit obligations and funded status: The following assumptions were used to determine the year-end benefit obligations:



	Dec. 30, 2012	Dec. 25, 2011
Discount rate	4.08%	4.86%
Rate of compensation increase	2.97%	2.96%

During 2012, the company made contributions of $94 million to the GRP. The company contributed $8 million to the U.K. retirement plan in 2012. Early in fiscal year 2013, the company contributed $50 million to the GRP. As a result of this contribution, the company has no further funding obligations to the GRP during 2013. The company expects to contribute $37 million to the U.K retirement plan in 2013.

Plan assets: The fair value of plan assets was approximately $2.6 billion and $2.4 billion at the end of 2012 and 2011, respectively. The expected long-term rate of return on these assets was 8.25% for 2012, and 8.75% for 2011 and 2010. The asset allocation for the GRP at the end of 2012 and 2011, and target allocations for 2013, by asset category, are presented in the table below:



Target Allocation			Allocation of Plan Assets
	2013		2012		2011
Equity securities	47	%	51	%	46	%
Debt securities	35		35		39
Other	18		14		15
Total	100	%	100	%	100	%

The primary objective of company-sponsored retirement plans is to provide eligible employees with scheduled pension benefits: the “prudent man” guideline is followed with regard to the investment management of retirement plan assets. Consistent with prudent standards for preservation of capital and maintenance of liquidity, the goal is to earn the highest possible total rate of return while minimizing risk. The principal means of reducing volatility and exercising prudent investment judgment is diversification by asset class and by investment manager; consequently, portfolios are constructed to attain prudent diversification in the total portfolio, each asset class, and within each individual investment manager’s portfolio. Investment diversification is consistent with the intent to minimize the risk of large losses. All objectives are based upon an investment horizon spanning five years so that interim market fluctuations can be viewed with the appropriate perspective. The target asset allocation represents the long-term perspective. Retirement plan assets will be rebalanced periodically to align them with the target asset allocations. Risk characteristics are measured and compared with an appropriate benchmark quarterly; periodic reviews are made of the investment objectives and the investment managers. The company’s actual investment return on its Gannett Retirement Plan assets was 12.6% for 2012, 0.4% for 2011 and 14.0% for 2010.

Retirement plan assets include approximately 1.2 million shares of the company’s common stock valued at approximately $22 million and $17 million at the end of 2012 and 2011, respectively. The plan received dividends of approximately $1 million on these shares in 2012.

Cash flows: The company estimates it will make the following benefit payments (from either retirement plan assets or directly from company funds), which reflect expected future service, as appropriate:



In thousands of dollars
2013	$	208,975
2014	$	214,648
2015	$	215,860
2016	$	217,673
2017	$	222,956
2018-2022	$	1,095,723

Multi-employer plans that provide pension benefits: The company contributes to a number of multi-employer defined benefit pension plans under the terms of collective-bargaining agreements (CBA) that cover its union-represented employees. 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 annual period ended Dec. 30, 2012, 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 plan’s year-end at Dec. 31, 2011 and Dec. 31, 2010, 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, Gannett’s contribution represented less than 5% of total contributions to the plan.

The company incurred expenses for multi-employer withdrawal liabilities of $3 million, $30 million and $4 million in 2012, 2011, and 2010, respectively. Other long-term liabilities on the Consolidated Balance Sheet as of Dec. 30, 2012 and Dec. 25, 2011 include $38 million and $42 million, respectively, for such withdrawal liabilities. For plans representing $30 million of the total, the actual withdrawal liabilities will not be known until 2013 or 2014 and no payments will be required until such determinations are made. Expenses and liabilities recorded by the company for the plans in 2011 were substantially higher than in previous years. The costs and liabilities recorded in 2011 primarily relate to withdrawal liabilities triggered upon the company’s decision in December 2011 to cease production activities at its Cincinnati publishing operations and transition them to a non-Gannett publisher in Columbus, OH.

Multi-employer Pension Plans

EIN Number/

Zone Status
Dec. 31,

FIP/RP Status
Pending/Implemented

Contributions(in thousands)

Surcharge Imposed

Expiration Dates of CBAs

Pension Plan Name

Plan Number

2012

2011

2012

2011

2010

AFTRA Retirement Plan (a)

13-6414972/001

Green
as of
Nov.
30,
2011

Green
as of
Nov.
30,
2010

965

896

858

7/13/2012

6/30/2013 12/16/2013

CWA/ITU Negotiated Pension Plan

13-6212879/001

Red

Implemented

572

146

169

11/13/2012-

3/27/2016

GCIU—Employer Retirement Benefit Plan (a)

91-6024903/001

Red

Implemented

380

280

331

4/13/2011-

1/31/2015

The Newspaper Guild International Pension Plan (a)

52-1082662/001

Red

Implemented

415

385

392

11/13/2012

12/20/2012

IAM National Pension Plan (a)

51-6031295/002

Green

341

308

315

4/30/2013

Teamsters Pension Trust Fund of Philadelphia and Vicinity (a)

23-1511735/001

Yellow

Implemented

876

1,054

995

12/14/2012

3/11/2013

Central Pension Fund of the International Union of Operating Engineers and Participating Employers (a)

36-6052390/001

Green
as of
Jan.
31,
2012

Green
as of
Jan.
31,
2011

158

163

166

4/30/2013

Central States Southeast and Southwest Areas Pension Fund

36-6044243/001

Red

Implemented

260

372

343

6/30/2013

Total

3,967

3,604

3,569

(a) 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.