Note 9 - Retirement Plans

12 Months Ended

Dec. 31, 2014

Compensation and Retirement Disclosure [Abstract]

Pension and Other Postretirement Benefits Disclosure [Text Block]

9.     Retirement Plans

We sponsor and contribute to defined benefit and defined contribution retirement plans covering substantially all of our full time employees. Our defined benefit pension plans include our active plan as well as two frozen plans that we assumed when we acquired the related businesses. The Gray Television, Inc. Capital Accumulation Plan (“the Capital Accumulation Plan”) is a defined contribution plan that is intended to meet the requirements of section 401(k) of the Internal Revenue Code.

Gray Pension Plan

Our active defined benefit plan covers substantially all of our full-time employees. Retirement benefits are based on years of service and the employee’s highest average compensation for five consecutive years during the last ten years of employment. The funding policy is consistent with the funding requirements of existing federal laws and regulations under the Employee Retirement Income Security Act of 1974.

The measurement dates used to determine the benefit information for our active defined benefit pension plan were December 31, 2014 and 2013, respectively. The following summarizes the active pension plan’s funded status and amounts recognized on our consolidated balance sheets at December 31, 2014 and 2013, respectively (dollars in thousands):

	December 31,
	2014			2013
Change in projected benefit obligation:
Projected benefit obligation at beginning of year	$	83,533		$	83,236
Service cost		5,162			5,165
Interest cost		4,106			3,553
Actuarial losses (gains)		16,712			(7,158	)
Benefits paid		(1,507	)		(1,263	)
Projected benefit obligation at end of year	$	108,006		$	83,533
Change in plan assets:
Fair value of pension plan assets at beginning of year	$	58,063		$	46,662
Actual return on plan assets		3,940			8,216
Company contributions		6,317			4,448
Benefits paid		(1,507	)		(1,263	)
Fair value of pension plan assets at end of year		66,813			58,063
Funded status of pension plan	$	(41,193	)	$	(25,470	)
Amounts recognized in our balance sheets consist of:
Accrued benefit cost	$	(10,057	)	$	(10,337	)
Accumulated other comprehensive income		(31,136	)		(15,133	)
Net liability recognized	$	(41,193	)	$	(25,470	)

        The accumulated benefit obligation amounts for our active defined benefit pension plan were $92.8 million and $72.2 million at December 31, 2014 and 2013, respectively. The long-term rate of return on assets assumption of was chosen from a best estimate range based upon the anticipated long-term returns for asset categories in which the pension plan is invested. The estimated rate of increase in compensation levels of is based on historical compensation increases for our employees.

	Year Ended December 31,
	2014			2013
Weighted-average assumptions used to determine net periodic benefit cost for our active pension plan:
Discount rate		4.97	%		4.31	%
Expected long-term rate of return on pension plan assets		7.00	%		7.00	%
Estimated rate of increase in compensation levels		5.63	%		5.63	%

	As of December 31,
	2014			2013
Weighted-average assumptions used to determine benefit obligations:
Discount rate		4.00	%		4.97	%
Estimated rate of increase in compensation levels		5.63	%		5.63	%

Pension expense is computed using the projected unit credit actuarial cost method. The net periodic pension cost for our active pension plan includes the following components (in thousands):

	Year Ended December 31,
	2014			2013			2012
Components of net periodic pension cost:
Service cost	$	5,162		$	5,165		$	4,452
Interest cost		4,106			3,553			3,315
Expected return on plan assets		(4,200	)		(3,400	)		(2,609	)
Recognized net actuarial loss		969			3,131			2,527
Net periodic pension cost	$	6,037		$	8,449		$	7,685

For our active pension plan, the estimated future benefit payments are as follows (in thousands):

Years			Amount
2015			$	1,989
2016				2,218
2017				2,455
2018				2,695
2019				3,071
2020	-	2024		23,153

The active pension plan’s weighted-average asset allocations by asset category were as follows:

	As of December 31,
	2014			2013
Asset category:
Insurance general account		28	%		32	%
Cash management accounts		3	%		3	%
Equity accounts		64	%		60	%
Fixed income account		5	%		5	%
Total		100	%		100	%

The investment objective is to achieve a consistent total rate of return (income, appreciation, and reinvested funds) that will equal or exceed the actuarial assumption with aversion to significant volatility.

The following is the target asset allocation:

	Target Range
Asset class:
Large cap equities	23%	to	91%
Mid cap equities	0%	to	15%
Small cap equities	0%	to	16%
International equities	5%	to	25%
Fixed income	0%	to	30%
Cash	0%	to	20%

Our equity portfolio contains securities of companies necessary to build a diversified portfolio, and that we believe are financially sound. Our fixed income portfolio contains obligations generally rated A or better with no maturity restrictions and an actively managed duration. The cash equivalents strategy uses securities of the highest credit quality.

Fair Value of Active Pension Plan Assets

We calculate the fair value of our active pension plan’s assets based upon the observable and unobservable net asset value of its underlying investments. We utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized by the fair value hierarchy proscribed by Accounting Standards Codification Topic 820, described in Note 4 “Fair Value Measurement.”

The following table presents the fair value of our active pension plan’s assets and classifies them by level within the fair value hierarchy as of December 31, 2014 and 2013, respectively (in thousands):

Active Pension Plan Fair Value Measurements

	As of December 31, 2014
	Level 1		Level 2		Level 3		Total
Assets:
Insurance general account	$	-	$	18,598	$	-	$	18,598
Cash management accounts		-		2,319		-		2,319
Equity accounts		-		42,608		-		42,608
Fixed income account		-		3,288		-		3,288
Total	$	-	$	66,813	$	-	$	66,813

	As of December 31, 2013
	Level 1		Level 2		Level 3		Total
Assets:
Insurance general account	$	-	$	18,759	$	-	$	18,759
Cash management accounts		-		1,959		-		1,959
Equity accounts		-		34,603		-		34,603
Fixed income account		-		2,742		-		2,742
Total	$	-	$	58,063	$	-	$	58,063

Acquired Pension Plans

In 2002 and 1998, we acquired companies with two underfunded pension plans (the “Acquired Pension Plans”). The Acquired Pension Plans were frozen by their prior plan sponsors and no new participants can be added to the Acquired Pension Plans. As of December 31, 2014, the Acquired Pension Plans had combined plan assets of $5.9 million and combined projected benefit obligations of $8.0 million. As of December 31, 2013, the Acquired Pension Plans had combined plan assets of $5.5 million and combined projected benefit obligations of $6.9 million. The net liability for the two Acquired Pension Plans is recorded as a liability in our financial statements as of December 31, 2014 and 2013.

Contributions

We expect to contribute a combined total of approximately $5.3 million to our active pension plan and the Acquired Pension Plans during the year ending December 31, 2015.

Capital Accumulation Plan

The Capital Accumulation Plan provides additional retirement benefits for substantially all employees. The Capital Accumulation Plan provides our employees with an investment option in our common stock and Class A common stock. It also allows for a matching contribution to be made by the Company in the form of our common stock. On December 9, 2008 and May 2, 2007, our Board of Directors increased the number of shares reserved for the Capital Accumulation Plan by 2,000,000 and 1,000,000 shares of our common stock, respectively. As of December 31, 2014, 1,593,412 shares remained available for issuance under the plan.

We may match employee contributions to the Capital Accumulation Plan, and such contributions may not exceed 6% of the employees’ gross pay. Our percentage match amount, if any, is determined by our Board of Directors before the beginning of each plan year and is made by a contribution of our common stock. Effective December 31, 2008, our Board of Directors suspended our matching contributions for the majority of our employees. For the years ended December 31, 2014, 2013 and 2012, our percentage match was 50% for certain employees included in a collective bargaining unit at one of our stations, although we did not match contributions for the remainder of our employees. Our contributions vest, based upon each employee’s number of years of service, over a period not to exceed five years.

Our matching contributions for the years ended December 31, 2014, 2013 and 2012 are as follows (dollars in thousands):

	Year Ended December 31,
	2014				2013				2012
	Shares		Amount		Shares		Amount		Shares		Amount
Matching contributions to the Capital Accumulation Plan		2,341	$	25		5,235	$	28		14,293	$	26