Publishing company receives conditional pension funding waiver

Plain-English summary

A publishing company requested a waiver of its pension plan's unpaid minimum funding contributions for the 2013 plan year because the recession had reduced advertising revenue. The company said it was adapting to changes in news consumption and targeted advertising, pursuing new advertising opportunities, cutting costs, and forecasting enough cash flow to meet future contributions. The IRS granted a conditional waiver that required full collateral acceptable to the Pension Benefit Guaranty Corporation, timely quarterly and annual contributions, restrictions on benefit or liability increases, and verification of payments. Failure to satisfy any condition would make the waiver retroactively null and void.

Ruling snapshot

• Question: Does the publishing company's pension plan qualify for a waiver of its required minimum funding contributions?
• Outcome: Approved
• Key authorities: IRC §§ 412(c) and 430(j)(3); ERISA § 302

Full text (IRS public release)

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DEPARTMENT OF THE TREASURY
INTERNAL REVENUE SERVICE
WASHINGTON, D.C. 20224

TAX EXEMPT AND
GOVERNMENT ENTITIES
DIVISION

JUL 31 2014

T:EP:RA:T1

Uniform Issue List: 408-03-00

Re:
* (the “Plan”).
Company =
EIN =

Dear

This letter constitutes notice that your request for a waiver of the required minimum
funding contributions for the Plan for the plan year ended December 31, 2013 has been
granted subject to the conditions listed below. This waiver is for the unpaid required
minimum contributions for the above listed plan year; all waiver amortization payments
representing the waiver must be paid as stated under section 412(c)(1)(C) of the
Internal Revenue Code (the “Code”).

1. Within one hundred and twenty (120) days of the receipt of the Internal
   Revenue Service (the “Service”) ruling letter, the Company will provide collateral
   acceptable to the Pension Benefit Guaranty Corporation (the “PBGC”) for the full
   amount of the waiver.

2. Starting with the quarterly contribution due October 15, 2014, the Company
   makes the required quarterly contributions to the Plan in a timely fashion while
   the Plan is subject to the minimum funding standard. For this purpose, the total
   amount of each quarterly contribution will be determined in accordance with
   section 430(j)(3)(D) and section 430(j)(3)(E) of the Code and can be comprised
   of several installments made prior to the respective due date of the quarterly
   contribution.

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3 The Company makes contributions to the Plan in amounts sufficient to meet the
minimum funding requirements for the Plan for the plan years ending December
31, 2013 through December 31, 2017 on or before September 15th of the year
following each respective plan year.

4. Under section 412 (c)(7) of the Code, the Company is restricted from
   amending the Plan to increase benefits and/or Plan liabilities while any
   of the waived funding deficiency remains unamortized, with only certain
   exceptions as defined in section 412(c)(7)(B).

5. The Company provides verification of payment of all contributions described
   above in a timely manner to the Service and the PBGC to the addresses below:

IRS-EP Classification

Chris Huxtable

400 North Eighth Street, Room 480
Richmond, VA 23219

Fax: 804-916-8222

Pension Benefit Guarantee Corporation
Corporate Finance and Restructuring Department
1200 K Street NW

Washington, DC 20005

Fax: 202-842-2643

You agreed to these conditions in a letter dated July 24, 2014. If any of these conditions
is not satisfied the waiver will be retroactively null and void.

This conditional waiver has been granted in accordance with section 412(c) of the Code
and section 302 of the Employee Retirement Income Security Act of 1974 (“ERISA”).

The Company is a publishing company. The temporary substantial business hardship
was precipitated by the economic recession which adversely impacted the Company’s
advertising revenue. The Company is focusing on the changing trends in the
consumption of news and more targeted forms of advertising. The Company has also
undertaken efforts that will lead to new opportunities for advertising sales. In addition
the Company has also aggressively cut costs and significantly reduced operating
expenses.

The Company has made timely contributions to the Plan in prior years and forecasts
sufficient income and cash flow to make the minimum required contributions over the
waiver amortization period.

Your attention is called to section 412(c)(7) of the Code and section 302(c)(7) of ERISA
which describe the consequences that would result in the event the Plan is amended to
increase benefits, change the rate in the accrual of benefits or to change the rate of

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vesting, while any portion of the waived funding deficiency remains unamortized.

Please note that any amendment to a profit sharing plan or any other retirement plan
(covering employees covered by this Plan) maintained by the Company, to increase
benefits, or any action by the Company or its authorized agents or designees (such as a
Board of Directors or Board of Trustees) that has the effect of increasing the liabilities of
those plans, would be considered an amendment for purposes of section 412(c)(7) of
the Code and section 302(c)(7) of ERISA. Similarly, the establishment of a new profit
sharing plan or any other retirement plan by the Company (covering employees covered
by this Plan) would be considered an amendment for purposes of section 412(c)(7) of
the Code and section 302(c)(7) of ERISA.

This ruling is directed only to the taxpayer that requested it. Section 6110(k)(3) of the
Code provides that it may not be used or cited by others as precedent.

When filing Form 5500 for the plan year ending December 31, 2013, the date of this
letter should be entered on Schedules SB (Actuarial Information). For this reason, we
suggest that you furnish a copy of this letter to the enrolled actuary who is responsible
for the completion of the respective Schedules SB.

We have sent a copy of this letter to the Manager, EP Classification in Baltimore,
Maryland and to the Manager, EP Compliance Unit in Chicago, Illinois.

If you wish to inquire about this ruling please contact *. Please address all
correspondence to SE:T:EP:RA:T2.

Sincerely,

William B. Hulteng, Manager
Employee Plans Technical

Enclosures:

Deleted Copy of Letter Ruling
Notice of Intention to Disclose

cc: