Retirement plans

We have various defined benefit retirement plans. Our principal defined benefit pension plan is the TEGNA Retirement Plan (TRP). In connection with our acquisition of KFMB, we assumed its preexisting pension plan which, as of the acquisition date, had a total net pension obligation of $7.3 million. All of KFMB’s plan participants’ benefits were frozen prior to the acquisition date. During the second quarter of 2018, the KFMB pension plan was merged into the TRP. The disclosure tables presented below include the assets and obligations of the TRP and the TEGNA Supplemental Retirement Plan (SERP). We use a December 31 measurement date convention for our retirement plans. Substantially all participants in the TRP and SERP had their benefits frozen before 2009, and in December 2017, we froze all remaining accruing benefits for certain grandfathered SERP participants.

Our pension expense, which include costs for our qualified TRP plan and non-qualified SERP plan, are presented in the following table (in thousands):



	2018			2017			2016
Service cost—benefits earned during the period	$	12		$	872		$	816
Interest cost on benefit obligation	21,337			23,985			26,111
Expected return on plan assets	(30,935		)	(26,322		)	(26,764		)
Amortization of prior service costs	168			635			670
Amortization of actuarial loss	5,124			8,357			7,615
Pension payment timing related charges	7,498			26			—
Total pension expense for company-sponsored retirement plans	$	3,204		$	7,553		$	8,448

The service cost component of our pension expense is recorded within the operating expense line items Cost of revenue, Business units - Selling, general and administrative, and Corporate - General and administrative within the Consolidated Statements of Income. All other components of the pension expense are included within the Other non-operating expenses line item of the Consolidated Statements of Income.

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).



	Dec. 31,
	2018			2017
Change in benefit obligations
Benefit obligations at beginning of year	$	614,111		$	606,413
Service cost	12			872
Interest cost	21,337			23,985
Actuarial (gain) loss	(40,135		)	26,700
Benefits paid	(36,222		)	(39,143		)
Acquisition of KFMB	25,966			—
Curtailment gain ⁽¹⁾	—			(4,716		)
Settlements ⁽²⁾	(30,274		)	—
Benefit obligations at end of year	$	554,795		$	614,111
Change in plan assets
Fair value of plan assets at beginning of year	$	439,149		$	388,168
Actual (loss) return on plan assets	(29,016		)	69,295
Employer contributions	45,219			20,829
Benefits paid	(36,222		)	(39,143		)
Acquisition of KFMB	18,694			—
Settlements ⁽²⁾	(30,274		)	—
Fair value of plan assets at end of year	$	407,550		$	439,149
Funded status at end of year	$	(147,245	)	$	(174,962	)
Amounts recognized in Consolidated Balance Sheets
Accrued benefit cost—current	$	(7,870	)	$	(30,742	)
Accrued benefit cost—noncurrent	$	(139,375	)	$	(144,220	)
(1) Curtailment gain in 2017 was a result of our decision to freeze the SERP plan accruals for certain grandfathered participants. Beginning in 2018, all SERP participants will no longer accrue benefits under this plan. (2) Settlements represent lump sum benefit payments to plan participants. When aggregate lump sums exceed the settlement threshold, pension payment timing related charges are incurred, and the lump sum payments prompting the charge are shown on a separate line from other benefit payments.

The funded status (on a projected benefit obligation basis of our principal retirement plans at December 31, 2018, is as follows (in thousands):



	Fair Value of Plan Assets		Benefit Obligation		Funded Status
TRP	$	407,550	$	491,354	$	(83,804	)
SERP ^(a)	—		62,892		(62,892		)
All other	—		549		(549		)
Total	$	407,550	$	554,795	$	(147,245	)

(a) The SERP is an unfunded, unsecured liability

The accumulated benefit obligation for all defined benefit pension plans was $554.8 million at December 31, 2018 and $614.1 million at December 31, 2017. Based on actuarial projections, cash contributions of $11.6 million are expected to be made to our retirement plans (comprised of contributions of $7.8 million for the SERP, $3.8 million for the TRP) during the year ended December 31, 2019.

The following table presents information for our retirement plans for which accumulated benefit obligation exceed assets (in thousands):



	Dec. 31,
	2018		2017
Accumulated benefit obligation	$	554,768	$	614,079
Fair value of plan assets	$	407,550	$	439,149

The following table presents information for our retirement plans for which projected benefit obligations exceed assets (in thousands):



	Dec. 31,
	2018		2017
Projected benefit obligation	$	554,795	$	614,111
Fair value of plan assets	$	407,550	$	439,149

The following table summarizes the pre-tax amounts recorded in accumulated other comprehensive loss that have not yet been recognized as a component of pension expense (in thousands):



	Dec. 31,
	2018			2017
Net actuarial losses	$	(182,610	)	$	(175,415	)
Prior service cost	(1,888		)	(2,056		)
Amounts in accumulated other comprehensive loss	$	(184,498	)	$	(177,471	)

The actuarial loss amounts expected to be amortized from accumulated other comprehensive income (loss) into net periodic benefit cost in 2019 are $6.0 million. The prior service cost amounts expected to be amortized from accumulated other comprehensive income (loss) into net periodic benefit cost in 2019 are $0.1 million. Additionally, in 2019, we expect to incur a settlement charge of $0.7 million as a result of certain lump-sum payments that we expect to make from the SERP plan in 2019.

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



	2018			2017
Current year net actuarial (loss) gain	$	(19,817	)	$	16,272
Amortization of previously deferred actuarial loss	5,124			8,357
Amortization of previously deferred prior service costs	168			635
Pension payment timing related charges	7,498			—
Curtailment gain	—			4,716
Prior service cost recognized in curtailment	—			26
Total	$	(7,027	)	$	30,006

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



	2018	2017	2016
Discount rate	3.64%	4.12%	4.46%
Expected return on plan assets	7.00%	7.00%	7.00%

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. In 2019, we expect to have pension expense of approximately $3.5 million.

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



	Dec. 31,
	2018	2017
Discount rate	4.34%	3.64%

Plan assets: The asset allocation for the TRP at the end of 2018 and 2017, and target allocations for 2019, by asset category, are presented in the table below:



Target Allocation			Allocation of Plan Assets
	2019		2018		2017
Equity securities	57	%	57	%	56	%
Debt securities	38	%	39	%	39	%
Other	5	%	4	%	5	%
Total	100	%	100	%	100	%

The primary objective of company-sponsored retirement plans is to provide eligible employees with scheduled pension benefits. 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. Our actual investment return on our TRP assets was -5.6% for 2018, 20.3% for 2017 and 7.4% for 2016.

Cash flows: We estimate we will make the following benefit payments (from either retirement plan assets or directly from our funds), which reflect expected future employee service, as appropriate (in thousands):



2019	$	48,038
2020	37,882
2021	38,384
2022	39,342
2023	39,195
2024-2028	$	192,299

401(k) savings plan

Substantially all our employees (other than those covered by a collective bargaining agreement) are eligible to participate in our principal defined contribution plan, The TEGNA 401(k) Savings Plan. Employees can elect to contribute up to 50% of their compensation to the plan subject to certain limits.

For most participants, the plan’s 2018 matching formula is 100% of the first 4% of employee contributions. We also make additional employer contributions on behalf of certain long-term employees. Compensation expense related to 401(k) contributions was $13.3 million in 2018, $14.4 million in 2017 and $13.5 million in 2016. We settle the 401(k) employee company stock match obligation by buying our stock in the open market and depositing it in the participants’ accounts.

Multi-employer plan

We contribute to the AFTRA Retirement Plan (AFTRA Plan), a multi-employer defined benefit pension plan, under the terms of collective-bargaining agreements (CBA) that cover certain union-represented employees. The risks of participating in this multi-employer plan are different from single-employer plans in the following aspects:


•	We play 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 we choose to stop participating in some of our multi-employer plans, we may be required to pay those plans an amount based on the unfunded status of the plan, referred to as withdrawal liability.

The Employee Identification Number (EIN) and three-digit plan number of the AFTRA Plan is 13-6414972/001.

The AFTRA Plan has a certified green zone status as of November 30, 2017. The zone status is based on information that we 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. A financial improvement plan or a rehabilitation plan is neither pending nor has one been implemented for the AFTRA Plan.

We make all required contributions to the AFTRA plan as determined under the respective CBAs. We contributed $2.4 million in 2018, $2.4 million in 2017 and $1.8 million in 2016. Our contribution to the AFTRA Retirement Plan represented less than 5% of total contributions to the plan. This calculation is based on the plan financial statements issued for the period ending November 30, 2017.

Expiration dates of the CBAs in place range from January 28, 2019 to December 5, 2019. The AFTRA 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.

We incurred no expenses for multi-employer withdrawal liabilities for the years ended December 31, 2018 and 2017.