The Pension Benefit Guaranty Corp. agreed to defer filing of liens or other statutory remedies against McClatchy Co.'s defined benefit plan so the Sacramento, Calif.-based company can continue negotiating with lenders, McClatchy said Wednesday.
“The agency remains engaged with McClatchy to find the best path forward for the more than 24,000 people covered under McClatchy’s pension plan, as well as workers and retirees in the other plans that we insure,” a PBGC spokesman said.
McClatchy entered into non-disclosure agreements with lenders holding about 87% of first lien notes and 100% of other liens. The company said in a statement that the discussions are "ongoing and productive," and that the standstill agreement with the PBGC will be helpful.
McClatchy President and CEO Craig Forman said in the statement that company officials are working with all parties "to reach an agreement that is in the best interests of our 24,000-plus pension plan participants and other stakeholders, and positions McClatchy for the future."
In November, McClatchy disclosed that it was discussing having the PBGC take over its qualified defined benefit plan. That plan, which was 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," the company said at the time.
