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Employee Benefit Plans
 12 Months Ended
Dec. 31, 2019
Retirement Benefits [Abstract]  
Employee Benefit Plans Employee Benefit Plans
We sponsor a noncontributory defined benefit pension plan and non-qualified Supplemental Executive Retirement Plans ("SERPs"). Both the defined benefit plan 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.
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 year.
The components of the expense consisted of the following:
 
 
For the years ended December 31,
(in thousands)
 
2019
 
2018
 
2017
 
 
 
 
 
 
 
Interest cost
 
$
23,287

 
$
23,836

 
$
25,966

Expected return on plan assets, net of expenses
 
(19,974
)
 
(22,232
)
 
(17,439
)
Amortization of actuarial loss and prior service cost

 
2,622

 
3,527

 
4,424

Settlement losses
 
—

 
11,713

 
—

Total for defined benefit plans
 
5,935

 
16,844

 
12,951

Multi-employer plans
 
132

 
190

 
253

SERPs
 
1,018

 
2,908

 
1,161

Defined contribution plan
 
10,494

 
8,619

 
9,183

Net periodic benefit cost
 
17,579

 
28,561

 
23,548

Allocated to discontinued operations
 
—

 
(543
)
 
(687
)
Net periodic benefit cost - continuing operations
 
$
17,579

 
$
28,018

 
$
22,861



In 2018, we recognized a $1.8 million non-cash settlement charge related to lump-sum distributions from our SERP. Settlement charges are recorded when total lump-sum distributions for a plan's year exceed the total projected service cost and interest cost for that plan year.

In November of 2018, we merged $306 million of pension assets and $419 million of pension obligations from our Scripps Pension Plan ("SPP”) into the Journal Communications, Inc. Plan (“JCI Plan”) that we also sponsor. The SPP retained pension assets and pension obligations totaling $9 million. Following the merger, we terminated the SPP and purchased a single premium group annuity contract from an insurance company in the amount of $53.5 million for the terminating SPP participants and certain participants in the newly merged JCI Plan. Upon issuance of the group annuity contract, the insurance company assumed all investment risk associated with the assets that were delivered as the annuity contract premium and assumed the obligation to make future annuity payments to approximately 600 remaining retirees receiving pension benefits in the SPP and approximately 1,500 remaining retirees receiving pension benefits in the newly merged JCI Plan. There was no change to the pension benefits for any plan participants as a result of these transactions and the purchase of the group annuity contract was funded directly by assets of the SPP and JCI Plan. In the fourth quarter of 2018, we recognized a one-time non-cash settlement charge of $11.7 million in connection with these transactions.

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)
 
2019
 
2018
 
2017
 
 
 
 
 
 
 
Actuarial gain/(loss)
 
$
(5,478
)
 
$
(7,765
)
 
$
12,205

Prior service cost
 
—

 
(424
)
 
—

Amortization of actuarial loss and prior service cost

 
2,622

 
3,527

 
4,424

Reclassification of actuarial loss related to settlement
 
—

 
11,713

 
—

Total
 
$
(2,856
)
 
$
7,051

 
$
16,629



In addition to the amounts summarized above, amortization of actuarial losses related to our SERPs recognized through other comprehensive income was $0.2 million in 2019, $0.3 million in 2018 and $0.2 million in 2017, and settlement losses in 2018 totaled $1.8 million. We recognized actuarial losses for our SERPs of $1.9 million and $2.5 million in 2019 and 2017, respectively, and a gain of $1.0 million in 2018.

Assumptions used in determining the annual retirement plans expense were as follows:
 
 
2019
 
2018 (1)
 
2017 (2)
 
 
 
 
 
 
 
Discount rate
 
4.38
%

3.71%-4.58%

 
4.26
%
Long-term rate of return on plan assets
 
5.50
%

5.10
%
 
4.20%-4.30%

(1) Range presented for 2018 discount rate represents the rates used for various remeasurement periods during the year as well as differing rates used for Scripps Pension Plan and Journal Communications, Inc. Plan.
(2) Range presented for long-term rate of return on plan assets for 2017 represents the rates used for Scripps Pension Plan and Journal Communications, Inc. Plan.
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 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.
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:
 
 
Defined Benefit Plans
 
SERPs
 
 
For the years ended December 31,
(in thousands)
 
2019
 
2018
 
2019
 
2018
 
 
 
 
 
 
 
 
 
Change in projected benefit obligation:
 
 
 
 
 
 
 
 
Projected benefit obligation at beginning of year
 
$
544,581

 
$
654,536

 
$
16,985

 
$
23,691

Interest cost
 
23,287

 
23,836

 
718

 
746

Benefits paid
 
(35,186
)
 
(33,872
)
 
(1,019
)
 
(1,021
)
Actuarial (gains)/losses
 
60,909

 
(46,800
)
 
1,857

 
(1,034
)
Plan Amendments
 
—

 
424

 
—

 
—

Settlements
 
—

 
(53,543
)
 
—

 
(5,397
)
Projected benefit obligation at end of year
 
593,591

 
544,581

 
18,541

 
16,985

Plan assets:
 
 
 
 
 
 
 
 
Fair value at beginning of year
 
361,891

 
464,441

 
—

 
—

Actual return on plan assets
 
75,405

 
(32,334
)
 
—

 
—

Company contributions
 
18,589

 
17,199

 
1,019

 
6,418

Benefits paid
 
(35,186
)
 
(33,872
)
 
(1,019
)
 
(1,021
)
Settlements
 
—

 
(53,543
)
 
—

 
(5,397
)
Fair value at end of year
 
420,699

 
361,891

 
—

 
—

Funded status
 
$
(172,892
)
 
$
(182,690
)
 
$
(18,541
)
 
$
(16,985
)
Amounts recognized in Consolidated Balance Sheets:
 
 
 
 
 
 
 
 
Current liabilities
 
$
—

 
$
—

 
$
(1,214
)
 
$
(1,231
)
Noncurrent liabilities
 
(172,892
)
 
(182,690
)
 
(17,327
)
 
(15,754
)
Total
 
$
(172,892
)
 
$
(182,690
)
 
$
(18,541
)
 
$
(16,985
)
 
 
 
 
 
 
 
 
 
Amounts recognized in accumulated other comprehensive loss consist of:
 


 


 


 


  Net actuarial loss
 
$
123,065

 
$
120,191

 
$
7,240

 
$
5,571

  Prior service cost
 
406

 
424

 
—

 
—



In 2020, we expect to recognize amortization of accumulated other comprehensive loss into net periodic benefit costs of $4.8 million (including $0.3 million for our SERPs).
Information for pension plans with an accumulated benefit obligation and projected benefit obligation in excess of plan assets was as follows:
 
 
Defined Benefit Plans
 
SERPs
 
 
As of December 31,
(in thousands)
 
2019
 
2018
 
2019
 
2018
 
 
 
 
 
 
 
 
 
Accumulated benefit obligation
 
$
593,591

 
$
544,581

 
$
18,541

 
$
16,985

Projected benefit obligation
 
593,591

 
544,581

 
18,541

 
16,985

Fair value of plan assets
 
420,699

 
361,891

 
—

 
—


Assumptions used to determine the defined benefit pension plans benefit obligations were as follows:
 
 
2019
 
2018
 
2017
 
 
 
 
 
 
 
Weighted average discount rate
 
3.40
%

4.38
%
 
3.70
%

In 2020, we expect to contribute $1.2 million to fund our SERPs and $31.8 million to fund our qualified defined benefit pension plan.
Estimated future benefit payments expected to be paid from the plans for the next ten years are $31.4 million in 2020, $31.9 million in 2021, $32.4 million in 2022, $33.0 million in 2023, $33.8 million in 2024 and a total of $175.0 million for the five years ending 2029.
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 our plans which cover the majority of employees. We evaluate our asset allocation target ranges for equity, fixed income and other investments annually. We monitor actual asset allocations quarterly 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,
 
 
2020
 
2019
 
2018
 
 
 
 
 
 
 
US equity securities
 
20
%
 
17
%
 
19
%
Non-US equity securities
 
30
%
 
39
%
 
28
%
Fixed-income securities
 
45
%
 
43
%
 
46
%
Other
 
5
%
 
1
%
 
7
%
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 and cash equivalents.
Under our asset allocation strategy, 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 invested in equity securities and other return-seeking assets. 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 table presents our plan assets as of December 31, 2019 and 2018:
 
 
As of December 31,
(in thousands)
 
2019
 
2018
 
 
 
 
 
Equity securities
 
 
 
 
Common/collective trust funds
 
$
237,015

 
$
168,547

Fixed income
 
 
 
 
Common/collective trust funds
 
181,176

 
166,079

Real estate fund
 
—

 
24,798

Cash equivalents
 
2,508

 
2,467

Fair value of plan assets
 
$
420,699

 
$
361,891



Our investments are valued using net asset value as a practical expedient as allowed under U.S. GAAP and therefore are not valued using the fair value hierarchy.

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 fund pertained to an investment in a real estate fund which invested in limited partnerships, limited liability corporations, real estate investment trusts, other funds and insurance company group annuity contracts. The valuations for these holdings were based on property appraisals using cash flow analysis and market transactions. The fund provided for quarterly redemptions with 110 days written notice.