Note 13. Retirement Plans

WAPA, a wholly owned subsidiary of the Company, makes contributions to the Televicentro de Puerto Rico Special Retirement Benefits (the "Retirement Plan"). The Retirement Plan is available to all reporters and union employees after completing three (3) months of service. Eligible employees, those meeting active service minimums and minimum age requirements, are eligible to receive a one-time lump sum payment at retirement, of two (2) weeks per year of service capped at a maximum payment of forty-five (45) weeks. The number of retirees is capped at five (5) per year. There are 144 participants in the Retirement Plan. Following is the plan's projected benefit obligation at December 31, 2017 and 2016. (amounts in thousands):

	2017			2016
Projected benefit obligation:
Balance, beginning of the year	$	3,027		$	2,865
Service cost		80			109
Interest cost		85			104
Actuarial (gain) loss		(469	)		(45	)
Benefits paid to participants		(481	)		(6	)

Balance, end of year	$	2,242		$	3,027

At December 31, 2017, 2016 and 2015, the funded status of the plan was as follows (amounts in thousands):

	2017			2016			2015
Excess of benefit obligation over the value of plan assets	$	(2,242	)	$	(3,027	)	$	(2,865	)
Unrecognized net actuarial loss		347			818			905
Unrecognized prior service cost		44			52			69

Accrued benefit cost	$	(1,851	)	$	(2,157	)	$	(1,891	)

The plan is unfunded. As such, the Company is not required to make annual contributions to the plan.

At December 31, 2017 and 2016, the amounts recognized in the consolidated balance sheets were classified as follows (amounts in thousands):

	2017			2016
Accrued benefit cost	$	(2,242	)	$	(3,027	)
Accumulated other comprehensive loss		391			870

Net amount recognized	$	(1,851	)	$	(2,157	)

Amounts recorded in accumulated other comprehensive loss are reported net of tax.

The benefits expected to be paid in each of the next five years and thereafter are as follows (amounts in thousands):

Years Ending December 31,	Amount
2018	$	242
2019		109
2020		91
2021		182
2022		235
2023 through 2026		582

	$	1,441

At December 31, 2017 and 2016, the following weighted-average rates were used:

	2017	2016
Discount rate on the benefit obligation	3.35%		3.78	%
Rate of employee compensation increase(a)	1.75% - 2.5%		4.00	%

(a) Rate of employee compensation increase is 1.75% for periods ending 2017-2021, and increasing to 2.5% for periods thereafter.

Pension expense for the years ended December 31, 2017, 2016 and 2015, consists of the following (amounts in thousands):

	2017		2016		2015
Service cost	$	80	$	109	$	112
Interest cost		85		104		102
Expected return on plan assets		—		—		—
Recognized actuarial loss (gain)		—		—		—
Amortization of prior service cost		8		17		17
Net loss amortization		1		42		51

	$	174	$	272	$	282

WAPA makes contributions to the Plan, a multiemployer pension plan with a plan year end of December 31 that provides defined benefits to certain employees covered by two CBAs. Our main CBA expires on May 31, 2022 and covers all of our unionized employees except for four employees covered by the other CBA scheduled to expire on June 27, 2019.

The risks in participating in such a plan are different from the risks of single-employer plans, in the following respects:

• Assets contributed to a multiemployer plan by one employer may be used to provide benefits to employees of any other participating employer.

• If a participating employer ceases to contribute to a multiemployer plan, the unfunded obligation of the plan allocable to such withdrawing employer may be borne by the remaining participating employer.

If WAPA completely or partially withdrew from the Plan, it would be obligated to pay complete or partial withdrawal liability. Under the statutory requirements applicable to withdrawal liability with respect to a multiemployer pension plan, in the event of a complete withdrawal from the Plan, WAPA would be obligated to make withdrawal liability payments to fund its proportionate share of the Plan's UVB's. WAPA's payment amount for a given year would be determined based on its highest contribution rate (as limited by MPRA) and its highest average contribution hours over a period of three consecutive plan years out of the ten-year period preceding the date of withdrawal. To the extent that the prescribed payment amount was not sufficient to discharge WAPA's share of the Plan's UVBs, WAPA's payment obligation would nevertheless end after 20 years of payments (absent a withdrawal that is part of a mass withdrawal, in which case the annual payments would continue indefinitely or until WAPA paid its share of the Plan's UVBs at the time of withdrawal).

WAPA has received Annual Funding Notices, Report of Summary Plan Information, Critical Status Notices ("Notices") and the above-noted Rehabilitation Plan, as defined by the Pension Protection Act of 2006 ("PPA"), from the Plan. The Notices indicate that the Plan actuary has certified that the Plan is in critical and declining status, the "Red Zone", as defined by the PPA and MPRA, due to the projected insolvency of the Plan within the next 19 years. A plan of rehabilitation ("Rehabilitation Plan") was adopted by the Trustees of the Plan ("Trustees") on May 1, 2010 and then updated on November 17, 2015. On May 29, 2010, the Trustees sent WAPA a Notice of Reduction and Adjustment of Benefits Due to Critical Status explaining all changes adopted under the Rehabilitation Plan, including the reduction or elimination of benefits referred to as "adjustable benefits." In connection with the adoption of the Rehabilitation Plan, most of the Plan participating unions and contributing employers (including the Newspaper Guild International and WAPA), agreed to one of the "schedules" of changes as set forth under the Rehabilitation Plan. In 2015, the Plan's Trustee's reviewed the Rehabilitation Plan and the financial projections under the Plan and determined that is was not prudent to continue benefit accruals under the current Plan and that implementation of an updated plan with a new benefit design would be in the best interest of the Plan's participants.

WAPA elected the "Preferred Schedule" and executed a Memorandum of Agreement, effective May 27, 2010 (the "MOA") and agreed to the following contribution rate increases: 3.0% beginning on January 1, 2013; an additional 3.0% beginning on January 1, 2014; and an additional 3% beginning on January 1, 2015. On July 1, 2017 WAPA executed an updated MOA under which it agreed to remain a contributing employer to the Plan through May 31, 2022 and to make contributions to the Plan at a fixed rate of $18.03 per week for each WAPA covered employee during such period (i.e., its contributions per employee will not increase during the term of its CBA or through any period during which a new CBA is entered into, if any).

The contributions required under the terms of the CBA and the effect of the Rehabilitation Plan as described above are not anticipated to have a material effect on the Company's results of operations. However, in the event other contributing employers are unable to, or fail to, meet their ongoing funding obligations, the financial impact on WAPA to contribute to any plan underfunding may be material. In addition, if a United States multiemployer defined benefit plan fails to satisfy certain minimum funding requirements, the Internal Revenue Service may impose a nondeductible excise tax of 5.0% on the amount of the accumulated funding deficiency for those employers contributing to the fund.

If WAPA completely or partially withdrew from the Plan, it would be obligated to pay complete or partial withdrawal liability (which could be material). Pursuant to the last available notice (for the Plan year ended December 31, 2016), WAPA's contributions to the Plan exceeded 5% of total contributions made to the Plan.3

Further information about the Plan is presented in the table below (amounts in thousands):

			Pension Protection Act Zone Status	Funding Improvement Plan/Rehabilitation Plan	WAPA's Contribution							Expiration Date of Collective Bargaining Agreements
											Surcharge Imposed
Pension Fund	EIN		2016	Status	2017		2016		2015
TNGIPP (Plan No. 001)		52-1082662	Red	Implemented	$	149	$	156	$	151	No	June 27, 2019 May 31, 2022