Newspaper publishing company A.H. Belo said it made a $20 million voluntary contribution to its pension plans during the third quarter, and used that, along with $23.5 million in liquidated plan assets, to transfer $43.5 million in pension liabilities to an insurance company.
“In addition to our focus on returning capital to our shareholders, we are committed in our efforts to de-risk our pension plans,” the company said in an Oct. 27 SEC filing. “This de-risking strategy has reduced the long-term pension liabilities of the company.”
The company didn’t name the insurance company to which it was transferring the liabilities, but said that as a result of the move, the company reduced the number of participants in its sponsored pension plans by 796, or 36%, and reduced its Pension Benefit Guaranty Corporation (PBGC) annual fees by $500,000, or 38%.
“Based on these actions, and holding constant the discount rate and the rate of return on pension assets, the company does not expect to have a mandatory contribution until 2023, and that payment would be $3 million,” said A.H. Belo.
Last week, fellow newspaper publisher The New York Times Company agreed with Massachusetts Mutual Life Insurance Company to transfer pension benefits and annuity administration from two of its pension plans for approximately $225 million in pension obligations.
The two pension plans involved were The New York Times Company’s Pension Plan and The Retirement Annuity Plan for Craft Employees of The New York Times Company. Under the terms of the agreements, the pension plans will purchase group annuity contracts from MassMutual for approximately 3,800 retirees, or their beneficiaries. The group annuity contracts include an irrevocable commitment by MassMutual to make annuity payments to the affected retirees. All other retirees will continue to receive monthly benefit payments from the plans.
“This arrangement is part of the company’s continued effort to manage the overall size and volatility of its pension plan obligations,” said The New York Times in an SEC filing. It said the transfer will not change the amount of the monthly pension benefits received by the affected retirees, or their beneficiaries.
The company said it expects to finalize the transactions by early 2018.
Tags: A.H. Belo, De-Risking, New York Times, Pension, Pension Risk Transfer