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Employee Benefit Plans
 12 Months Ended
Dec. 31, 2015
Compensation and Retirement Disclosure [Abstract]  
Employee Benefit Plans
Employee Benefit Plans
We sponsor two noncontributory defined benefit pension plans covering certain Scripps employees that began employment prior to June 30, 2008, as well as certain former Journal Communications, Inc. ("Journal") employees. We also have two non-qualified Supplemental Executive Retirement Plans ("SERPs") covering Scripps employees and certain former Journal employees. Both of the defined benefit plans and the SERPs have frozen the accrual of future benefits.
We sponsor a defined contribution plan covering substantially all non-union and certain union employees. We match a portion of employees' voluntary contributions to this plan. In connection with freezing the accrual of service credits under certain of our defined benefit pension plans, we began contributing additional amounts (transition credits) to certain employees' defined contribution retirement accounts in 2011. These transition credits, which were made through 2015, were determined based upon the employee’s age, compensation and years of service.
Other union-represented employees are covered by defined benefit pension plans jointly sponsored by us and the union, or by union-sponsored multi-employer plans.
We use a December 31 measurement date for our retirement plans. Retirement plans expense is based on valuations as of the beginning of each fiscal year.
The components of the expense consisted of the following:
 
 
For the years ended December 31,
(in thousands)
 
2015
 
2014
 
2013
 
 
 
 
 
 
 
Service cost
 
$
—

 
$
85

 
$
79

Interest cost
 
30,477

 
25,539

 
23,732

Expected return on plan assets, net of expenses
 
(24,320
)
 
(23,481
)
 
(21,501
)
Amortization of actuarial loss
 
4,617

 
2,861

 
4,192

Curtailment/Settlement losses
 
46,793

 
—

 
—

Total for defined benefit plans
 
57,567

 
5,004

 
6,502

Multi-employer plans
 
180

 
393

 
407

Withdrawal from GCIU multi-employer plan
 
351

 
4,100

 
—

SERP
 
1,107

 
896

 
2,335

Defined contribution plans
 
9,858

 
11,739

 
11,379

Net periodic benefit cost
 
69,063

 
22,132

 
20,623

Allocated to discontinued operations
 
(482
)
 
(8,985
)
 
(5,532
)
Net periodic benefit cost - continuing operations
 
$
68,581

 
$
13,147

 
$
15,091



Other changes in plan assets and benefit obligations recognized in other comprehensive income (loss) were as follows:
 
 
For the years ended December 31,
(in thousands)
 
2015
 
2014
 
2013
 
 
 
 
 
 
 
Current year actuarial gain/(loss)
 
$
1,026

 
$
(75,527
)
 
$
52,063

Amortization of actuarial loss
 
4,617

 
2,861

 
4,192

Curtailment/Settlement losses
 
46,793

 
—

 
—

Total
 
$
52,436

 
$
(72,666
)
 
$
56,255


In addition to the amounts summarized above, amortization of actuarial losses of $0.2 million, $0.3 million and $0.4 million were recorded through other comprehensive income in 2015, 2014 and 2013, respectively, related to our SERP plan. We recognized an actuarial gain of $2.3 million in 2015 and actuarial losses of $0.6 million and $0.7 million in 2014 and 2013, respectively, related to our SERP plan. A one-time curtailment charge of $1.1 million was recorded in the second quarter of 2015 related to our defined benefit pension plan as a result of the impact of the spin-off of our newspaper business.
On August 24, 2015, we offered eligible former employees with vested, deferred pension plan benefits the option to receive their benefits either as a lump-sum distribution or an immediate annuity payment. Approximately 4,300 former Scripps employees were eligible for this offer; former Journal Communications employees were not affected. All distributions were made from existing pension plan assets; company funds were not used to make the lump-sum distributions. The funded status of the plan remained materially unchanged as a result of this offer. The lump-sum payments were made in November 2015, at which time we recorded a non-cash pension settlement charge of $45.7 million.
Assumptions used in determining the annual retirement plans expense were as follows:
 
 
2015 (1)
 
2014
 
2013
 
 
 
 
 
 
 
Discount rate
 
4.01%-4.53%

5.08
%
 
4.27
%
Long-term rate of return on plan assets
 
4.10%-6.10%

5.25
%
 
4.65
%
Increase in compensation levels
 
N/A

2.0
%
 
3.3
%
(1) Ranges presented for discount rate and long-term rate of return on plan assets for 2015 represent the rates used for various remeasurement periods during the year.
The discount rate used to determine our future pension obligations is based on a dedicated bond portfolio approach that includes securities rated Aa or better with maturities matching our expected benefit payments from the plans. The increase in compensation levels assumption is based on actual past experience and our near-term outlook.
The expected long-term rate of return on plan assets is based upon the weighted-average expected rate of return and capital market forecasts for each asset class employed.
Changes in other key actuarial assumptions affect the determination of the benefit obligations as of the measurement date and the calculation of net periodic benefit costs in subsequent periods. Recent actuarial studies indicate life expectancies are longer and thus increase the total expected benefit payments to plan participants. Our benefit obligations at December 31, 2014 reflected the new life expectancy assumptions which increased our pension obligations by approximately $45 million in 2014.
Obligations and Funded Status — The defined benefit pension plan obligations and funded status are actuarially valued as of the end of each year. The following table presents information about our employee benefit plan assets and obligations:
 
 
For the years ended December 31,
 
 
Defined Benefit Plans
 
SERP
(in thousands)
 
2015
 
2014
 
2015
 
2014
 
 
 
 
 
 
 
 
 
Accumulated benefit obligation
 
$
611,257

 
$
620,623

 
$
19,800

 
$
15,261

Change in projected benefit obligation:
 
 
 
 
 
 
 
 
Projected benefit obligation at beginning of year
 
$
620,623

 
$
504,571

 
$
15,261

 
$
14,872

Service cost
 
—

 
85

 
—

 
—

Interest cost
 
30,477

 
25,539

 
747

 
638

Benefits paid
 
(28,670
)
 
(24,708
)
 
(1,105
)
 
(810
)
Actuarial (gains)/losses
 
(46,479
)
 
115,136

 
(2,299
)
 
561

Curtailments/Settlements
 
(148,006
)
 
—

 
—

 
—

Journal acquisition
 
183,312

 
—

 
10,778

 
—

Newspaper divestiture
 
—

 
—

 
(3,582
)
 
—

Projected benefit obligation at end of year
 
611,257

 
620,623

 
19,800

 
15,261

Plan assets:
 
 
 
 
 
 
 
 
Fair value at beginning of year
 
495,047

 
456,591

 
—

 
—

Actual return on plan assets
 
(21,132
)
 
63,090

 
—

 
—

Company contributions
 
—

 
74

 
1,105

 
810

Benefits paid
 
(28,670
)
 
(24,708
)
 
(1,105
)
 
(810
)
Curtailments/Settlements
 
(148,006
)
 
—

 
—

 
—

Journal acquisition
 
110,558

 
—

 
—

 
—

Fair value at end of year
 
407,797

 
495,047

 
—

 
—

Funded status (1)
 
$
(203,460
)
 
$
(125,576
)
 
$
(19,800
)
 
$
(15,261
)
Amounts recognized in Consolidated Balance Sheets:
 
 
 
 
 
 
 
 
Current liabilities
 
$
—

 
$
—

 
$
(1,295
)
 
$
(1,048
)
Noncurrent liabilities
 
(203,460
)
 
(125,576
)
 
(18,505
)
 
(14,213
)
Total
 
$
(203,460
)
 
$
(125,576
)
 
$
(19,800
)
 
$
(15,261
)
Amounts recognized in accumulated other comprehensive loss consist of:
 
 
 
 
 
 
 
 
Unrecognized net actuarial (gain)/loss
 
$
139,321

 
$
191,757

 
$
4,924

 
$
9,632



(1) For 2014, $3.6 million of the SERP liability related to the divested newspaper operations is included in long-term liabilities of discontinued operations.
In 2016, for our defined benefit pension plans, we expect to recognize amortization of actuarial loss from accumulated other comprehensive loss into net periodic benefit costs of $4.2 million (including $0.2 million for the SERP).
Information for pension plans with an accumulated benefit obligation and projected benefit obligation in excess of plan assets was as follows:
 
 
As of December 31,
 
 
Defined Benefit Plans
 
SERP
(in thousands)
 
2015
 
2014
 
2015
 
2014
 
 
 
 
 
 
 
 
 
Accumulated benefit obligation
 
$
611,257

 
$
620,623

 
$
19,800

 
$
15,261

Projected benefit obligation
 
611,257

 
620,623

 
19,800

 
15,261

Fair value of plan assets
 
407,797

 
495,047

 
—

 
—


Assumptions used to determine the defined benefit pension plans benefit obligations were as follows:
 
 
2015
 
2014
 
2013
 
 
 
 
 
 
 
Weighted average discount rate
 
4.55
%

4.23
%
 
5.08
%
Increase in compensation levels
 
N/A

 
N/A

 
2.0
%

We expect to contribute $1.3 million in 2016 to fund SERP benefits. Additionally, we expect to contribute $5 million to $10 million for our qualified defined benefit pension plans in 2016.
Estimated future benefit payments expected to be paid from the plans for the next ten years are $33.6 million in 2016, $34.4 million in 2017, $35.3 million in 2018, $35.9 million in 2019, $36.8 million in 2020 and a total of $192.4 million for the five years ending 2025.
Plan Assets and Investment Strategy
Our long-term investment strategy for pension assets is to earn a rate of return over time that minimizes future contributions to the plan while reducing the volatility of pension assets relative to pension liabilities. The strategy reflects the fact that we have frozen the accrual of service credits under defined benefit pension plans covering the majority of employees. We evaluate our asset allocation target ranges for equity, fixed income and other investments annually. We monitor actual asset allocations monthly and adjust as necessary. We control risk through diversification among multiple asset classes, managers and styles. Risk is further monitored at the manager and asset class level by evaluating performance against appropriate benchmarks.
Information related to our pension plan asset allocations by asset category were as follows:
 
 
Target
allocation
 
Percentage of plan assets
as of December 31,
 
 
2016
 
2015
 
2014
 
 
 
 
 
 
 
US equity securities
 
20
%
 
14
%
 
11
%
Non-US equity securities
 
29
%
 
21
%
 
15
%
Fixed-income securities
 
45
%
 
58
%
 
70
%
Other
 
6
%
 
7
%
 
4
%
Total
 
100
%
 
100
%
 
100
%

U.S. equity securities include common stocks of large, medium and small capitalization companies, which are predominantly U.S. based. Non-U.S. equity securities include companies domiciled outside of the U.S. and American depository receipts. Fixed-income securities include securities issued or guaranteed by the U.S. government, mortgage backed securities and corporate debt obligations. Other investments include real estate funds.
In 2015, we began the transition to a new asset allocation strategy in which approximately 45% of plan assets are invested in a portfolio of fixed income securities with a duration approximately that of the projected payment of benefit obligations. The remaining 55% of plan assets are to be invested in equity securities and other return-seeking assets. The new allocation will be completed by the end of 2016. The expected long-term rate of return on plan assets is based primarily upon the target asset allocation for plan assets and capital markets forecasts for each asset class employed.

The following tables present our plan assets using the fair value hierarchy as of December 31, 2015 and 2014:
 
 
December 31, 2015
(in thousands)
 
Total
 
Level 1
 
Level 2
 
Level 3
 
 
 
 
 
 
 
 
 
Equity securities
 
 
 
 
 
 
 
 
Common/collective trust funds
 
$
146,314

 
$
—

 
$
146,314

 
$
—

Fixed income
 


 

 

 

Common/collective trust funds
 
234,923

 
—

 
234,923

 
—

Real estate fund
 
14,670

 
—

 
—

 
14,670

Cash equivalents
 
11,890

 
11,890

 
—

 
—

Fair value of plan assets
 
$
407,797

 
$
11,890

 
$
381,237

 
$
14,670


 
 
December 31, 2014
(in thousands)
 
Total
 
Level 1
 
Level 2
 
Level 3
 
 
 
 
 
 
 
 
 
Equity securities
 
 
 
 
 
 
 
 
Common/collective trust funds
 
$
128,189

 
$
—

 
$
128,189

 
$
—

Fixed income
 
 
 
 
 
 
 
 
Common/collective trust funds
 
343,462

 
—

 
343,462

 
—

Real estate fund
 
21,661

 
—

 
—

 
21,661

Cash equivalents
 
1,735

 
1,735

 
—

 
—

Fair value of plan assets
 
$
495,047

 
$
1,735

 
$
471,651

 
$
21,661



Equity securities-common/collective trust funds and fixed income-common/collective trust funds are comprised of shares or units in commingled funds that are not publicly traded. The underlying assets in these funds (equity securities and fixed income securities) are publicly traded on exchanges and price quotes for the assets held by these funds are readily available. Common/collective trust funds are typically valued at their net asset values that are calculated by the investment manager or sponsor of the fund and have daily or monthly liquidity.

Real estate pertains to an investment in a real estate fund which invests in limited partnerships, limited liability corporations, real estate investment trusts, other funds and insurance company group annuity contracts. The valuations for these holdings are based on property appraisals using cash flow analysis and market transactions.

The following table presents a reconciliation of Level 3 assets held during 2015 and 2014:
(in thousands)
 
Real Estate Fund
 
 
 
As of December 31, 2013
 
$
19,534

Unrealized gains/(losses)
 
2,127

As of December 31, 2014
 
21,661

Journal acquisition
 
4,802

Unrealized gains/(losses)
 
2,761

Sales
 
(14,554
)
As of December 31, 2015
 
$
14,670