Retirement Plans

12 Months Ended

Dec. 31, 2021

Retirement Plans

Retirement Plans

Note 16. 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 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 154 participants in the Retirement Plan. Following is the plan’s projected benefit obligation at December 31, 2021 and 2020 (amounts in thousands):

	2021		2020
Projected benefit obligation:
Balance, beginning of the year	$	3,089	$	2,637
Service cost		127		116
Interest cost		58		76
Actuarial (gain) loss		(126)		422
Benefits paid to participants		(41)		(162)
Balance, end of year	$	3,107	$	3,089

At December 31, 2021 and 2020, the funded status of the plan was as follows (amounts in thousands):

	2021		2020
Excess of benefit obligation over the value of plan assets	$	(3,107)	$	(3,089)
Unrecognized net actuarial loss		772		957
Unrecognized prior service cost		13		20
Accrued benefit cost	$	(2,322)	$	(2,112)

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

At December 31, 2021 and 2020, the amounts recognized in the accompanying Consolidated Balance Sheets were classified as follows (amounts in thousands):

	2021		2020
Accrued benefit cost	$	(3,107)	$	(3,089)
Accumulated other comprehensive loss		785		977
Net amount recognized	$	(2,322)	$	(2,112)

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):

	December 31, 2021
2022	$	214
2023		182
2024		129
2025		139
2026		135
2027 through 2031		957
	$	1,756

At December 31, 2021 and 2020, the following weighted-average rates were used:

	2021		2020
Discount rate on the benefit obligation	2.46	%	2.00	%
Rate of employee compensation increase(a)	2.50	%	1.75 % - 2.50	%

(a) Rate of employee compensation increase is 1.75% per year through 2021, and 2.50% per year thereafter.

Pension expense for the years ended December 31, 2021 and 2020, consists of the following (amounts in thousands):

	2021		2020
Service cost	$	127	$	116
Interest cost		58		76
Expected return on plan assets		—		—
Recognized actuarial loss (gain)		—		—
Amortization of prior service cost		7		8
Net loss amortization		58		40
	$	250	$	240

WAPA also makes contributions to a multiemployer pension plan (the “Plan”) with a plan year end of December 31, that provides defined benefits to certain employees covered by a Collective Bargaining Agreement (“CBA”). The CBA expires on May 31, 2022 and covers all of our unionized employees.

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 employers.

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 below-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 it 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.

On July 1, 2017, WAPA executed an updated MOA pursuant to 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 the effective date for 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.

Pursuant to the last available notice (for the Plan year ended December 31, 2020), WAPA’s contributions to the Plan exceeded 5% of total contributions made to the Plan.

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

									Expiration
									Date of
		Pension Protection	Funding Improvement	WAPA’s					Collective
		Act Zone Status	Plan/Rehabilitation Plan	Contribution				Surcharge	Bargaining
Pension Fund	EIN	2020	Status	2021		2020		Imposed	Agreements
TNGIPP (Plan No. 001)	52-1082662	Red	Implemented	$	144	$	141	No	May 31, 2022