McClatchy Co., Sacramento, Calif., is suspending paying out benefits to some participants in its non-qualified supplemental executive retirement plans.
The newspaper publisher is suspending the benefits as a result of an ongoing liquidity crisis, it announced in a news release Thursday.
"This decision is not taken lightly, but at a time when the company is actively negotiating the future of the qualified pension plan, it would be inconsistent with our culture to continue payments on the non-qualified plans," Elaine Lintecum, chief financial officer, said in the news release.
The company's "limited number of supplemental retirement plans" are funded on a pay-as-you-go basis, and McClatchy paid a total of $8.9 million in benefits for the plans in 2018, according to the company's most recent 10-K filing.
McClatchy Co. previously announced in its third-quarter earnings report on Nov. 13 it was discussing having the Pension Benefit Guaranty Corp. take over its qualified defined benefit plan.
That plan, closed to new participants in 2009, has $1.3 billion in assets and as of March 31 was underfunded by $535 million. The $124 million in contributions coming due "greatly exceeds the company's anticipated cash balances and cash flow given the size of its operations relative to the obligations due, and creates a significant liquidity challenge in 2020," that earnings report said.
The company further said in that report its goal is to reach a resolution by March 30.
In the Thursday news release, the company said the current decision not to release unsecured, non-qualified payments as part of its restructuring discussions has no impact on benefits in the qualified DB plan or continuing operations.
Ms. Lintecum said the company is releasing no further information while it continues its restructuring discussions. How long the suspension of non-qualified benefits will last has yet to be determined.
