Retirement and Postretirement Plans

9 Months Ended

Sep. 30, 2020

Compensation And Retirement Disclosure [Abstract]

Retirement and Postretirement Plans

Note 8:  Retirement and Postretirement Plans

On January 17, 2017, Nexstar assumed Media General’s pension and postretirement plan obligations upon consummation of the merger of the entities. As a result, Nexstar has a funded, qualified non-contributory defined benefit retirement plan which covers certain employees and former employees. Additionally, there are non-contributory unfunded supplemental executive retirement and ERISA excess plans which supplement the coverage available to certain executives. All of these retirement plans are frozen. Nexstar also has a retiree medical savings account plan which reimburses eligible retired employees for certain medical expenses and an unfunded plan that provides certain health and life insurance benefits to retired employees who were hired prior to 1992.

On September 19, 2019, Nexstar assumed Tribune’s pension and postretirement obligations upon consummation of the merger of the entities. As a result, Nexstar has a qualified and non-contributory defined benefit retirement plan which covers certain of Tribune’s employees and former employees. This retirement plan is frozen in terms of pay and service. Nexstar also assumed three defined benefit pension plans (two of which are frozen with the third representing 2% of the total Tribune related projected benefit obligation) for Tribune’s other employees and former employees.  These three plans are not material individually or in aggregate.  Nexstar also provides postretirement health care and life insurance benefits to eligible employees (who retired prior to January 1, 2016) under a variety of plans.

The following tables provide the components of net periodic benefit cost (credit) for Nexstar’s pension and other postretirement benefit plans (“OPEB”) (in thousands):

	Media General											Tribune
	Pension Benefits						OPEB					Pension Benefits						OPEB
	Three Months Ended September 30,						Three Months Ended September 30,					Three Months Ended September 30,						Three Months Ended September 30,
	2020			2019			2020			2019		2020			2019			2020		2019
Service cost	$	-		$	-		$	5		$	-	$	248		$	32		$	-	$	-
Interest cost		2,925			3,875			138			200		13,374			1,841			33		5
Expected return on plan assets		(4,925	)		(5,475	)		-			-		(22,341	)		(3,024	)		-		-
Amortization of prior service costs		-			-			(13	)		-		-			-			-		-
Amortization of net loss		-			-			43			-		-			-			-		-
Net periodic benefit cost (credit)	$	(2,000	)	$	(1,600	)	$	173		$	200	$	(8,719	)	$	(1,151	)	$	33	$	5
	Media General											Tribune
	Pension Benefits						OPEB					Pension Benefits						OPEB
	Nine Months Ended September 30,						Nine Months Ended September 30,					Nine Months Ended September 30,						Nine Months Ended September 30,
	2020			2019			2020			2019		2020			2019			2020		2019
Service cost	$	-		$	-		$	15		$	-	$	744		$	32		$	-	$	-
Interest cost		8,775			11,625			413			600		40,122			1,841			99		5
Expected return on plan assets		(14,775	)		(16,425	)		-			-		(67,023	)		(3,024	)		-		-
Amortization of prior service costs		-			-			(38	)		-		-			-			-		-
Amortization of net loss		-			-			128			-		-			-			-		-
Net periodic benefit cost (credit)	$	(6,000	)	$	(4,800	)	$	518		$	600	$	(26,157	)	$	(1,151	)	$	99	$	5

During the three and nine months ended September 30, 2020, Nexstar’s cash contributions to the Tribune qualified pension plans were $0 and $5.7 million, respectively. During the three and nine months ended September 30, 2019, Nexstar made no cash contribution to the Tribune qualified pension plans. In 2020 and 2019, there were no mandatory cash contribution requirements for the Media General qualified pension plans and for the Tribune and Media General OPEB.

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act was signed into law and includes a provision that allows employers to defer payment of contributions to U.S. defined benefit pension plans due in 2020 until January 1, 2021. Nexstar elected not to defer the remaining cash contribution requirements to its qualified pension plans under the CARES Act. In October 2020, Nexstar fulfilled its remaining contribution requirements to the Tribune qualified pension plans for the current year (See Note 17).

The primary investment objective of the pension benefit plans is to build and ensure an adequate pool of assets to support the benefit obligations to participants, retirees and beneficiaries. To meet this objective, the pension benefit plans seek to earn a rate of return on assets greater than the liability discount rate, with a prudent level of risk and diversification. The current investment policy includes a strategy intended to maintain an adequate level of diversification, subject to normal portfolio risks. As a result of the general market downturn resulting from the COVID-19 pandemic, the fair value of the pension plans’ assets declined in the first half of 2020. The market significantly rebounded in the third quarter of 2020 but remains volatile. While the Company continues to monitor the performance of the pension plans’ assets, the fluctuations have not materially impacted the Company’s financial position or liquidity in the first three quarters of 2020. To the extent that there is further material deterioration in plan assets, the Company’s pension benefit plans may require additional contributions and/or may negatively impact future pension credit or expense of the Company.

In September 2020, the Tribune defined benefit retirement plans offered certain terminated vested participants a voluntary, limited time offer to receive their pension benefit in a single lump sum payment or to start a monthly payment, payable as of December 1, 2020. To be eligible for this offer, participants must have terminated employment prior to July 1, 2020, such employment shall remain terminated through December 1, 2020 and have a lump sum value of $50,000 or less. If a participant commences benefits, dies, or is rehired prior to December 1, 2020, the offer shall no longer be valid. The participants eligible to take this limited time offer can submit their elections on or before October 31, 2020. As of the filing of this Quarterly Report on Form 10-Q, Nexstar is unable to reasonably estimate the benefit payments from the Tribune pension plan assets in connection with this offer. However, we anticipate the Tribune qualified pension plans will make benefit payments from the pension plan assets in the fourth quarter of 2020.