Early Retirement Incentive Program Q&As
Certain employees have been given the opportunity to participate in an Early Retirement Incentive Program (ERIP). Under the ERIP, employees who choose to retire on February 28, 2019:
- will receive a supplemental benefit based on their years of service (the Supplemental Benefit)
- may take their frozen pension benefit under the McClatchy Company Retirement Plan (the Frozen Pension) as a lump sum, and
- will also be eligible for subsidized COBRA coverage.
Each of these benefits is explained in further detail in Q&A-6, Q&A-7 and Q&A-8, respectively.
If you elect to participate in the ERIP and return a signed Waiver and Release by the deadlines noted in Q&A-4, your last day of employment will be February 28, 2019 (termination date). Please also refer to Q&A-15 for further information.
You are required to remain in employment and perform your daily duties and responsibilities through the termination date.
You will need to submit your signed Retirement Election Form and return it to your People Team representative by February 19, 2019. You will also need to sign and return the Waiver and Release Agreement by March 18, 2019, and not revoke the Waiver and Release Agreement.
There are three parts to the ERIP package: a Supplemental Benefit, the opportunity to take a lump sum distribution of your Frozen Pension (if applicable) and continuation of health benefits through Company-subsidized COBRA.
The Supplemental Benefit is a lump-sum payment payable to you as a single sum credit under The McClatchy Company Retirement Plan (the Retirement Plan or the MCRP) equal to two (2) weeks of your base pay, plus direct sales commission (if applicable), for each full or partial year of continuous service with McClatchy or an affiliate. The maximum amount of Supplemental Benefit you may receive is equal to twenty-six (26) weeks of your base pay, plus direct sales commission (if applicable). The Supplemental Benefit is not a standard benefit under the MCRP but is being offered as part of the ERIP, on a one-time basis.
If you had a break in service from the Company, continuous service is determined from your most recent rehire date. Partial years of service will be counted as a full year.
Base pay for full-time salaried employees will be determined by using their regular weekly base salary compensation rate on the established termination date. Base pay for full-time hourly employees will be determined by multiplying their base hourly compensation rate on the established termination date (exclusive of overtime) by the standard number of weekly hours the employees are regularly scheduled to work. Base pay for part-time hourly employees will be determined by multiplying their regular hourly base compensation rate on the established termination date (exclusive of overtime) by the average number of weekly hours worked in the six-month period beginning with the first pay period in June, 2018 and ending with the last pay period in December, 2018.
If applicable, direct sales commission will be added to the base pay calculation by averaging weekly payouts for the prior year (calculated on a 52-week average beginning January 2018 through December 2018).
Base pay will not include overtime, incentives/bonuses, or differentials.
Most full-time employees who have worked for McClatchy since at least 2008 earned a pension benefit under the MCRP, a qualified pension plan that is now administered by McClatchy; this benefit was frozen effective March 31, 2009 (the Frozen Pension). Your Frozen Pension may include a pension benefit that you earned under prior pension plans that merged into the Retirement Plan.
Under the ERIP, if you have earned a Frozen Pension, you are able to receive an immediate lump sum distribution of your Frozen Pension (or, if you choose, an immediate annuity). A lump sum distribution is generally not a payment option available under the MCRP but is being offered as part of the ERIP, on a one-time basis.
If you do not have a Frozen Pension, the benefit described in this Q&A-7 does not apply to you.
If you are covered under McClatchy’s health care plans (medical, dental and vision) as of the termination date and timely elect to continue benefits coverage through COBRA, you (and your covered dependents, if applicable) will be entitled to health plan coverage at the active employee premium rates for the plans in which you were enrolled as of the termination date, for up to three (3) months. McClatchy will pay the balance of the COBRA premium for these three (3) months.
After three (3) months, you may elect to continue COBRA for another fifteen (15) months, provided you pay the entire COBRA premium, plus the two (2) percent administrative fee. In some cases, COBRA coverage may extend to twenty-nine (29) or thirty-six (36) months. Eligibility for COBRA is subject to the terms and conditions of the plan.
The Company’s obligation to pay a portion of your COBRA premium payments shall cease immediately if you obtain other group health insurance coverage prior to the end of the three (3) month period described above.
You will receive a COBRA notification from PayFlex. To elect COBRA, you must complete and return a COBRA election form to PayFlex within the time period indicated on the COBRA notification letter. You will not be automatically enrolled. If you do not return the election form within the time period indicated, you forfeit your right to continuation of coverage, including any COBRA subsidy from the Company. Contact PayFlex at 1-800-359-3921, 6 a. m. – 5 p.m. Pacific Standard Time Monday through Friday, if you do not receive the COBRA notification packet within three weeks of your termination date. .
You cannot be enrolled in COBRA and another group health care program at the same time. If you or any covered dependents become eligible for Medicare after you elect COBRA, COBRA coverage for that person will end.
If eligible, your coverage through COBRA will begin the first of the month after your termination date, if you return the COBRA election form within the designated time period.
You can pay for your COBRA by check or electronic funds transfer directly from your bank account. Your COBRA notification letter will contain information regarding the payment options.
If you have not yet reached age 65, you have the option to either (a) receive the lump sum distribution of your Frozen Pension and/or your Supplemental Benefit (or, if you elect an annuity form of payment, the first payment of your annuity) in March 2019 or (b) defer payment of the Frozen Pension and/or Supplemental Benefit to a later month, up to the time your reach age 65. If you elect to defer payment beyond March 2019, there is a possibility that, depending on the Retirement Plan’s funding level in the future, the Retirement Plan may be restricted by applicable law in its ability to pay benefits in the form of a lump sum. Specifically, if the Retirement Plan’s funding level (as defined by the IRS) were to fall below 80 percent, no more than 50% of your benefits could be paid as a lump sum, and if it were to fall below 60 percent, no portion of your benefits could be paid as a lump sum. McClatchy cannot guarantee that it will be able to pay the Frozen Pension or the Supplemental Benefit in the form of a lump sum should you elect to defer payment beyond March 2019.
If you are age 65 or older, you will receive the lump sum distribution of your Frozen Pension and your Supplemental Benefit (or, if you elect an annuity form of payment, the first payment of your annuity) in March 2019. The option to defer your distribution is not available to you.
If the lump sum value of your Supplemental Benefit together with your Frozen Pension, if any, is $5,000 or less, your benefit will automatically be paid in a lump sum in March 2019; you cannot elect to defer your benefit, nor can you elect an annuity form of payment.
You will make your elections as to the form of payment and, if you are not yet age 65, the timing of payment, for both the Supplemental Benefit and the Frozen Pension on the Benefit Election Form. You will receive the Benefit Election Form on or around February 8 as part of your election package, and it must be returned to The McClatchy Company by March 15, 2019.
If you are married, you cannot elect a lump sum form of payment for your Supplemental Benefit and/or your Frozen Pension unless your spouse gives his or her written, notarized consent to the lump sum form of payment on the Spousal Consent form that will be provided with your election package.
You will receive your lump sum payment, or, if you elect an annuity, your first monthly payment, during the last week of March 2019. Note that if you elect a lump sum distribution, whether for rollover to an IRA, or payable directly to you, a check will be mailed to your home; you will be responsible for depositing the check to your IRA or other financial institution.
If you would like to take advantage of the ERIP you must submit your completed Retirement Election Form to your local People/HR representative by February 19, 2019. If you do not volunteer for the ERIP, you will not receive any additional benefits under the MCRP and your employment with McClatchy will continue on the same terms and conditions as it does today. McClatchy does not intend to make the ERIP available again. It’s important to consider the opportunity carefully.
In order to take advantage of the ERIP you must complete the Waiver and Release Agreement by March 18, 2019, and allow it to become irrevocable. If you 1) do not sign the Waiver and Release Agreement, or 2) inform us that you do not intend to sign it, or 3) revoke your signature pursuant to the terms of the Waiver and Release Agreement, then your employment will not end on February 28, 2019 (or if your employment has ended due to your completion of the Retirement Election Form, you will be reinstated to your prior position), and you will be treated as if you have made the decision not to retire.
You will have until March 15, 2019 to decide what form of payment to elect. However, if you want to participate in the program, you must return the Retirement Election Form by February 19, 2019.
With respect to the Frozen Pension, you can run your own pension estimates by going to Employee Self Service>Benefit>Benefit Information>Pension Estimates.
Lump sum payments will not be displayed for a future calendar year, because the interest rates used to determine that amount change each year. Your lump sum amount could increase or decrease.
Calculations for the Supplemental Benefit are currently not available on this site.
If you currently are age 65 or older and you volunteer for the ERIP, you do not have the option of deferring your benefit payments and you will need to complete and return the Benefit Election Form to The McClatchy Company by March 15, 2019.
If you are age 65 or older and married, and do not return the Benefit Election Form by March 15, 2019, your Supplemental Benefit will generally be paid to you under the 100% Joint & Survivor Annuity option, with your spouse on record as the beneficiary. If you are unmarried, your supplemental benefit will be paid as a Single Life Annuity and no benefits will be payable following your death.
If you are age 65 or older and married, your Frozen Pension will be paid under the plan’s applicable default Joint & Survivor Annuity option, with your spouse on record as the beneficiary. If you are unmarried, your Frozen Pension will be paid as a Single Life Annuity and no benefits will be payable following your death.
Provided you have not yet reached age 65, you have the option to elect immediate distribution of your Supplemental Benefit and to defer payment of your Frozen Pension to a later date, or vice versa. Please be aware that if payment is deferred to a later date, you may be restricted from taking some or all of your benefits as a single lump sum payment, as explained in Q&A-11 above.
Yes, you make a separate and independent election for each of the Supplemental Benefit and the Frozen Pension, so you can elect different forms of payment for each benefit. All your eligible payment options will be presented on your personalized Benefit Election Form that will be distributed to you on or around Feb. 8, including detailed explanations for each payment type being offered.
If you elect a lump sum payment, you may roll some or all of it over directly to either another employer’s tax-qualified plan (including a governmental 457(b) plan that agrees to separately account for such amounts) or an Individual Retirement Account (IRA) (excluding a SIMPLE IRA, a Coverdell Education Savings Account – formerly known as an Education IRA - or Roth IRA). Or, you may elect to have the payment made directly to you, but if you choose this option, McClatchy must withhold 20% Federal income tax and any applicable state income taxes. A Special Tax Notice with more details will be provided with your election package on or around February 8.
Your benefits are insured by the Pension Benefit Guarantee Corporation (PBGC). When the PBGC takes over a plan, it pays pension benefits through its insurance program. Most participants and beneficiaries receive all of the pension benefits they would have received under their plan, but some people may lose certain benefits that are not guaranteed. For additional general information about the PBGC and the pension insurance program guarantees, go to the “General FAQs about PBGC” on PBGC’s website at www.pbgc.gov/generalfaqs.
If you are covered under the Company's group life insurance plan, your coverage will end on your termination date. You have 31 days from this date to request an application and make your first premium payment. Conversion or portability is not automatic. Please call 1-800-882-8395 to request conversion or portability.
LTD insurance will end on your last day of employment. No continuation or conversion option is available.
You will have several options to choose from depending on your account balance.
- If your balance is $1,000 or less, your account balance will automatically be paid to you in a single lump sum payment unless you decide to roll this payment over to another Individual Retirement Account (IRA) or to another qualified employer plan.
- If your balance is over $1,000 but $5,000 or less, your account balance will automatically be rolled over to an IRA account in your name with Vanguard unless you decide you want to 1) roll this payment over to another IRA or qualified plan, or 2) receive it as a single lump sum payment paid directly to you.
- If your balance is over $5,000, the following options apply:
- Single lump sum cash payment – You may elect to have your benefit paid directly to you. The payment will be subject to a federal income tax withholding of 20%. In addition, the payment may be subject to state income tax withholding and a 10% penalty tax for early withdrawal if you are under age 55.
- Direct rollover payment – You may elect to have your money directly rolled over to any IRA or to another qualified employer plan.
- Deferred payment to age 70½ – This option will allow you to leave your money in the Plan and defer distribution to a later date (but no later than age 70½). You can request to have your account balance paid out to you at any time prior to age 70½. While your balance remains in the Plan, you may continue to change your investments in your account through Vanguard.
You will have three options for accessing your account or inquiring about loan balance(s). You can visit Vanguard.com to check your balance and conduct certain transactions anytime. You can also conduct transactions anytime using the VOICE® Network, Vanguard’s 24-hour automated phone service, at 1-800-523-1188. For personal assistance, you can speak with a Vanguard Participant Services associate at the same toll-free number Monday through Friday from 5:30 a.m. to 6 p.m., Pacific Standard Time (8:30 a.m. to 9 p.m., Eastern Standard Time).
If you currently have an outstanding 401(k) loan and do not repay the outstanding loan balance within ninety (90) days from the date of termination, your outstanding loan balance will be considered in default. A defaulted loan will be treated as a distribution and you may have to pay income taxes and a 10% penalty tax on the taxable portion.
Contact Vanguard at 1-800-523-1188 for loan payoff information.
If you participated in the 2018 Health Care Reimbursement or the 2018 Dependent Care Assistance Plan of the FSA plan and have not filed claims toward your full 2018 contribution, you can continue to make claims against your balance until March 31, 2019, for expenses incurred in 2018.
If you enrolled in the 2019 Health Care Reimbursement portion of the FSA plan, and your balance (which is your total year to date contributions less any claims made in the current plan year) at the time of termination is greater than zero, you will have three (3) options:
- Elect to have the remainder of your current plan year’s election deducted from your final paycheck (before-tax). You can incur claims through December 31, 2019, and continue to make claims against your balance until March 31, 2020.
- Elect COBRA and continue participation on an after-tax basis. You can incur claims through December 31, 2019 and continue to make claims against your balance until March 31, 2020.
- Discontinue participation in the plan. If you are eligible for COBRA continuation but decline participation through COBRA, you may continue to make claims against your balance until March 31, 2020 for expenses incurred in 2019 but prior to termination.
If you enrolled in the 2019 Health Care Reimbursement portion of the FSA plan and your balance (which is your total year to date contributions less any claims made in the current plan year) at the time of termination is less than zero, you can continue to make claims up to your termination date. You will not be eligible to make claims after your date of termination.
If you are enrolled in the 2019 Dependent Care Assistance Plan, you can send in claims against your 2019 account balance until March 31, 2020 for services rendered prior to your termination date.
You may continue to file claims directly with PayFlex. If you have questions about your account(s), please call PayFlex Customer Service at 1-800-284-4885, 5 a.m. through 5 p.m. Pacific Standard Time Monday through Friday. You may also access your account online at www.healthhub.com.
Any unused funds, including the company contribution, in your HSA account belong to you. These funds can be used to reimburse future healthcare expenses. PayFlex will charge a $5 per month administrative fee if you maintain an HSA balance with PayFlex after you terminate employment. Your HSA will be subject to monthly fee beginning on the first day of the calendar month following your termination date. Alternatively, you can transfer your HSA to another financial institution of your choice. You should contact PayFlex for more information on transferring your HSA.
Eligible Employees (and, if applicable, dependents), who are covered under McClatchy’s Voluntary Accident Plan as of their termination date, may retain their coverage through the end of the month in which their termination occurs. This plan has a portability provision, which means the coverage can be continued even after you leave McClatchy. Allstate will mail a portability package to you at the address on file; or, you may contact the Client Service Center at 1-800-521-3535, Monday through Friday 8 a.m. to 8 p.m. Eastern Standard Time.
Eligible Employees (and, if applicable, dependents), who are covered under McClatchy’s Identity Theft Plan as of their termination date, may retain their coverage through the end of the month in which their termination occurs. This plan has a portability provision, which means the coverage can be continued even after the employee leaves McClatchy. InfoArmor will mail a portability package to you at the address on file or you may contact Customer Care at 1-800-789-2720, or email email@example.com.
All year-to-date earned but unused vacation will be paid on your final paycheck.
The state unemployment office will determine your eligibility for unemployment compensation benefits. Please contact your People team representative for additional local unemployment office information.
Retirees are required to wait at least six months before being rehired at McClatchy or any other McClatchy affiliate.
The same 6-month rule described above also applies to freelance and independent contractor opportunities.
If you fail to sign and return the appropriate Retirement Election Form to your local People/HR representative by the February 19 deadline, you will be ineligible for the ERIP. In addition, if you do not sign the Waiver and Release Agreement, or if you revoke the Waiver and Release Agreement within the applicable revocation period, you will not be eligible for the ERIP.
You should rely only upon the written information that the company has provided to you about this Program. You should not rely on information or statements you receive from any managers or co-workers. Your decision to participate should be made independent of any future possible programs, business changes, or actions that the company may take or make available. If you have any additional questions, please contact your People Team (HR) representative. You may also want to consult your personal financial or tax advisor before making your decision about whether to retire now.