AT&T has announced that it will be transferring the assets and liabilities associated with its pension plan to Athene, a highly-rated insurance company that specializes in managing annuity payments. This move is part of AT&T's effort to become the leading 5G and broadband provider in the country. The leadership team is committed to preserving the most important and significant benefits to its retirees, despite an increasingly challenging and competitive environment. This move is expected to be a win-win for both the retirees and the company, as it will provide retirees with an expert in the field, while also being more cost-effective and simplifying the administration for AT&T.
Sponsored Article
This transaction covers retirees who receive certain monthly pension benefits from the AT&T Pension Benefit Plan. Generally, it is based on the form of the benefit, the amount, and whether the retiree started receiving the pension benefit before October 15, 2022. Retirees who are affected will receive monthly payments from Athene starting in August. The change will not affect the amount of the monthly pension payment. The gross monthly payment will be in the same amount and generally paid under the same terms as the benefits retirees currently receive.
While the annuity purchase changes who pays and administers the pension payments, it does not affect the amount of the payment. However, the net payment retirees receive could differ due to changes in benefits deductions or reimbursements and withholdings. For example, tax withholdings could change due to annual changes in tax rates or if retirees change their withholding instructions. In addition, the tax withholding calculation used by Athene could result in slight differences from the withholding calculation used in the past. If retirees have any garnishments or other legally required deductions from their pension payments, those will continue and may change in the future. If retirees currently pay for any retiree health coverage (medical, dental, etc.) from their monthly payment, then going forward those deductions will not be applied to their check and they will see their monthly amount increase. If retirees are currently receiving any Medicare Part B reimbursement payment that is being added to their monthly payment, then going forward that reimbursement payment will not be applied to their check and they will see their monthly amount decrease.
If retirees' monthly pension benefit currently includes payments for retiree health coverage or Medicare Part B premiums, after the switch to Athene, they will need to start paying for retiree health coverage directly and receive any applicable Medicare Part B reimbursement separately. This only impacts how retirees' health coverage is administered, which will be through the AT&T Benefits Center. Athene will still administer their pension.
The move to Athene is expected to be more cost-effective and simplify the administration for AT&T. Athene is a highly-rated insurance company that manages the financial risks associated with annuity payments as part of their core business. They are experts in what they do, and they do it well. Insurance companies, like Athene, are heavily regulated to protect retirees' interests. That means retirees have protection from a variety of risks, including investment risk and longevity risk.
Retirees do not need to take any action right now. In July, Athene will send them a welcome kit and will ask them to review their personal information. They will provide instructions on how to make any changes, if needed. Retirees can visit go.att.com/pensiontransfer for more information. If they have any further questions right now, they can contact the Fidelity Service Center at 1-866-956-3115. Athene will be in touch with them in July.
