Pensioners
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Updated as of April 16, 2020

As previously disclosed in McClatchy’s press release dated November 13, 2019, we have been in active restructuring negotiations with the Pension Benefit Guaranty Corporation (PBGC), the federal agency that guarantees benefits under McClatchy’s qualified pension plan, and our largest secured creditor to address the future of our pension obligations and capital structure.

On February 13, 2020, we announced that we are commencing a voluntary restructuring under Chapter 11 of the U.S. Bankruptcy Code. This will provide immediate protection to the Company as we continue our work to definitively address the Company’s funded debt, strengthen our balance sheet, and address our pension obligations moving forward.

On April 16, 2020, we announced that we received a non-binding offer to purchase the company through this proven process from funds owned by Chatham Asset Management and Brigade Capital Management. Importantly, under terms of the proposal, we will be able to execute a change in ownership while addressing legacy debt and pension obligations.

We continue to expect that this process will provide certainty to qualified pension plan participants. Under the proposal, the PBGC would take over McClatchy’s qualified pension plan, The McClatchy Company Retirement Plan, meaning that PBGC would assume the assets and liabilities of the pension plan and continue to pay benefits to the plan participants, subject to federal statutory limits. We continue to believe that such a solution would not have an adverse impact on qualified pension benefits for substantially all plan participants.

All pension plan participants will receive or have already mailings about our Chapter 11 filing and case. If you received a mailing and still have questions, you can always find additional information here on our dedicated website, www.McClatchyTransformation.com, or by calling +1 (866) 810-6898.

Thank you for your continued patience during this process.

Qualified Pension Benefits

Qualified pension plans are subject to the Employee Retirement Income Security Act of 1974—a federal law that is designed to protect pension participants like yourselves—and are covered by the PBGC. PBGC is the federal insurer of private-sector defined benefit pension plans like McClatchy’s qualified pension plan, and guarantees benefits under those plans in the event the pension plan does not have sufficient assets to pay all benefits.

Under the proposal, the PBGC would take over McClatchy’s qualified pension plan, The McClatchy Company Retirement Plan, meaning that PBGC would assume the assets and liabilities of the pension plan and continue to pay benefits to the plan participants, subject to federal statutory limits. McClatchy continues to believe that such a solution would not have an adverse impact on qualified pension benefits for substantially all plan participants.

Non-Qualified Pension Benefits

Non-qualified pension plans are not covered by the PBGC, and therefore will not be assumed by the PBGC. If you receive a non-qualified pension benefit, such as a McClatchy Supplemental Executive Retirement Plan (SERP) or a former Knight Ridder Benefit Restoration Plan (BRP), the rights and recovery will be determined through the Court process. You should visit www.kccllc.net/McClatchy for more information.

Frequently Asked Questions

1. What is the PBGC?

The Pension Benefit Guaranty Corporation (“PBGC”) is the federal insurer of private-sector defined benefit pension plans, including The McClatchy Company Retirement Plan, McClatchy’s qualified pension plan. This means that PBGC guarantees the benefits under the pension plan, subject to certain federal statutory limits. If PBGC takes over the qualified plan, it would assume the assets and liabilities of the pension plan and continue to pay benefits to the plan participants, subject to these limits. McClatchy continues to believe expects that substantially all of the participants and beneficiaries under the qualified pension plan would see no changes to their benefits as a result of a takeover by the PBGC.

2. Will my pension change as a result of this filing? Will I continue to receive my pension?

McClatchy has applied to the Pension Benefit Guaranty Corporation (“PBGC”) to terminate McClatchy’s qualified pension plan, The McClatchy Company Retirement Plan. If the PBGC agrees that the pension plan should be terminated, it would assume the assets and liabilities of the pension plan and continue to pay benefits to the plan participants up to federal statutory limits. We expect that substantially all of the participants and beneficiaries under the qualified pension plan would see no changes to their benefits as a result of a takeover by the PBGC. However, until PBGC takes over the pension plan, McClatchy will continue to administer the plan and pay plan benefits. In addition, once the notice of intent to terminate has been issued, the pension plan is prohibited by law from paying lump sum distributions in any amount. Aside from that restriction on lump sum payments, the plan will continue to pay benefits as usual.

3. Will there be any changes to my pension as a result of a sale process? Will I continue to receive my pension?

McClatchy has applied to the Pension Benefit Guaranty Corporation (“PBGC”) to terminate McClatchy’s qualified pension plan, The McClatchy Company Retirement Plan. If the PBGC agrees that the pension plan should be terminated, it would assume the assets and liabilities of the pension plan and continue to pay benefits to the plan participants up to federal statutory limits. We expect that substantially all of the participants and beneficiaries under the qualified pension plan would see no reduction to their benefits as a result of a takeover by the PBGC. However, until PBGC takes over the pension plan, McClatchy will continue to administer the plan and pay plan benefits.

4. If McClatchy is assumed by new ownership, will I still receive my pension payments on the same schedule and via the same distribution means?

Under the current proposal, the PBGC would take over McClatchy’s qualified pension plan, The McClatchy Company Retirement Plan, meaning that PBGC would assume the assets and liabilities of the pension plan and continue to pay benefits to the plan participants, subject to federal statutory limits. We continue to believe that such a solution would not have an adverse impact on qualified pension benefits for substantially all plan participants.

5. What happens to the non-qualified plan in the event of a sale?

If you receive a non-qualified pension benefit, such as a McClatchy supplemental executive retirement plan (SERP) or a former Knight Ridder Benefit Restoration Plan (BRP), the rights and recovery will be determined through the Court process, and you should visit www.kccllc.net/McClatchy for more information.

6. How will my pension change if the PBGC grants relief to McClatchy?

Under the proposal, the PBGC would take over McClatchy’s qualified pension plan, The McClatchy Company Retirement Plan, meaning that PBGC would assume the assets and liabilities of the pension plan and continue to pay benefits to the plan participants, subject to federal statutory limits. We continue to believe that such a solution would not have an adverse impact on qualified pension benefits for substantially all plan participants. Non-qualified pension plans are not covered by the PBGC, and therefore will not be assumed by the PBGC. If you receive a non-qualified pension benefit, such as a McClatchy supplemental executive retirement plan (SERP) or a former Knight Ridder Benefit Restoration Plan (BRP), you should visit www.kccllc.net/McClatchy for more information.

7. How do I know whether my qualified pension benefit will be impacted if the PBGC takes over the plan?

Any further questions you have about the impact of a PBGC takeover on your qualified pension benefit would be best directed to your own financial advisor or legal counsel. We cannot provide specific advice regarding your pension benefit.

8. Will I still receive my pension payments on the same schedule and via the same distribution means?

Under the proposal, the PBGC would take over McClatchy’s qualified pension plan, The McClatchy Company Retirement Plan, meaning that PBGC would assume the assets and liabilities of the pension plan and continue to pay benefits to the plan participants, subject to federal statutory limits. We continue to believe that such a solution would not have an adverse impact on qualified pension benefits for substantially all plan participants. If you receive a non-qualified pension benefit, such as a McClatchy supplemental executive retirement plan (SERP) or a former Knight Ridder Benefit Restoration Plan (BRP), you should visit www.kccllc.net/McClatchy for more information.

9. I was affected by McClatchy’s suspension of pension payments on its non-qualified SERP plans. Will my pension payments be reinstated following this filing? Will I receive the missed payment from January 2? And why wasn’t there any notification to pension recipients when this occurred?

If you receive a non-qualified pension benefit, such as a McClatchy supplemental executive retirement plan (SERP) or a former Knight Ridder Benefit Restoration Plan (BRP), the rights and recovery will be determined through the Court process, and you should visit www.kccllc.net/McClatchy for more information. The Company disclosed SERP payment suspension in a press release dated January 2, 2020.

10. How do I know if I receive qualified or non-qualified pension benefits?

If you have any questions about your pension benefits or what pension plan you are a participant of, please call the KCC hotline at +1 (866) 810-6898.

11. I received a notice of termination for the McClatchy Company Retirement Plan in the mail. What does it mean? Am I losing my pension benefits?

McClatchy has applied to the Pension Benefit Guaranty Corporation to terminate McClatchy’s qualified pension plan, The McClatchy Company Retirement Plan. This does not mean that you are losing your pension benefits. If the PBGC agrees that the pension plan should be terminated, it would assume the assets and liabilities of the pension plan and continue to pay benefits to the plan participants up to federal statutory limits. We expect that substantially all participants and beneficiaries under the qualified pension plan would see no changes or reduction to their benefits as a result of a takeover by the PBGC. However, until PBGC takes over the pension plan, McClatchy will continue to administer the plan and pay plan benefits, subject to certain restrictions, such as payment of lump sums. Moreover, as a result of the bankruptcy filing, the pension plan is prohibited by law from paying certain forms of benefits such as the Social Security level income annuity and term certain options. Aside from these restrictions, the plan will generally continue to pay benefits as usual.

12. How will I be kept informed during this process? Where can I go if I have additional questions?

You can find additional information here on our dedicated website,  www.McClatchyTransformation.com, throughout the process or by calling +1 (866) 810-6898.