AT&T Pension Plan

The plan encompasses multiple programs. Management Cash Balance Program: a cash-balance account that earned annual pay credits until the program was frozen to new pay credits in 2002; existing balances continue earning annual interest credits until distribution. Legacy management programs (legacy SBC and BellSouth subsidiaries) use pay-related formulas for non-bargained management employees. Bargained programs (CWA and IBEW): flat-dollar per pension band per year of credited service (craft formula); pension bands are increased annually through collective bargaining, with 1% annual band increases negotiated for 2026 through 2029. Bargained employees remain in active accrual status.

This is general educational information about how the plan's formula works, not a calculation of your individual benefit. Your actual benefit depends on your service, pay history, and the plan terms in effect during your employment.

In April 2023 AT&T purchased non-participating single-premium group annuity contracts transferring approximately $8.05 billion in defined benefit pension obligations and related plan assets to Athene Annuity and Life Company (and its New York affiliate) for approximately 96,000 AT&T retirees and beneficiaries. State Street Global Advisors Trust Co. served as independent fiduciary. The transaction saved AT&T approximately $9.6 million annually in PBGC flat-rate premiums. The deal is the subject of ongoing class-action litigation in which former participants allege AT&T's selection of Athene prioritized company financial benefits over retiree safety.

In a pension risk transfer (PRT), an employer transfers some or all of its pension obligations to an insurance company through a group annuity contract. If your benefit was transferred, your monthly payment generally stays the same, but the company paying it changes, and PBGC insurance is replaced by state insurance guaranty association coverage. For this plan, the counterparty was Athene Annuity and Life Company (2023).

Do AT&T management employees still earn new pension credits?

No. The Management Cash Balance Program was frozen to new pay credits in 2002, so management employees no longer accumulate new annual pay credits, though existing account balances continue to earn annual interest credits until retirement or separation. Management employees hired after the freeze are not enrolled in the defined benefit plan. By contrast, bargained employees (CWA and IBEW members) continue to earn new pension benefits each year under craft formulas, with pension band increases negotiated annually through their unions.

Can AT&T employees take a lump sum instead of a monthly pension?

Yes. AT&T pension participants may elect a one-time lump-sum payment rather than monthly annuity payments. Both union and management employees can take a full lump sum; management participants also have the option to convert only a portion to a lump sum while taking the remainder as a monthly annuity. Lump-sum values are calculated using IRS segment rates and life expectancy factors, so rising interest rates reduce lump-sum amounts and timing of the election can significantly affect the payout.

What happened to the obligations transferred to Athene in 2023, and is my benefit safe?

In April 2023 AT&T transferred approximately $8.05 billion in obligations for roughly 96,000 retirees and beneficiaries to Athene Annuity and Life Company through a group annuity contract. Those retirees now receive monthly payments directly from Athene; benefit amounts are unchanged. Athene's obligations are backed by its insurance reserves, regulated by state insurance commissioners, and covered by state guaranty associations (limits vary by state). A class-action lawsuit challenging AT&T's fiduciary process in selecting Athene was pending as of 2024.

Is my AT&T pension protected by the PBGC?

Most single-employer defined benefit pensions are insured by the Pension Benefit Guaranty Corporation (PBGC), a federal agency. If a covered plan terminates without enough money to pay promised benefits, the PBGC pays benefits up to a legal maximum that varies by age. Benefits that have been transferred to an insurance company through a pension risk transfer are no longer PBGC insured and are instead backed by state guaranty associations.

Should I take my AT&T pension as a lump sum or an annuity?

There is no single right answer. The decision depends on your health and life expectancy, your other retirement assets, whether you need to provide for a survivor, and the interest rate environment that sets the lump sum value. Our lump sum versus annuity guide walks through the trade-offs in detail.