Understanding the Impact of AT&T's Pension Plan Change to Athene

AT&T has revealed its intentions to transition the responsibilities and resources linked to its pension to Athene, an insurance firm known for handling annuity payments. This step forms a crucial part of AT&T's ambitious agenda to secure its position as the top 5G and broadband provider nationwide. Despite a challenging and competitive marketplace, the company leadership is determined to maintain the vital benefits for its retired personnel. This strategic shift is anticipated to bring mutual benefits for retirees and the corporation, offering retirees a specialized administrator while also facilitating cost-effectiveness and simplified administration for AT&T.

The arrangement encompasses retirees entitled to specific monthly pensions from AT&T's Pension Benefit Plan. This largely depends on the structure of the benefit, the sum, and the time the retiree began receiving these benefits - typically before October 15, 2022. Affected retirees will commence receiving their monthly payments from Athene starting August. The shift will have no impact on the monthly pension amount, as the gross payment will remain unchanged and generally follow the same terms currently in place.

While the annuity acquisition alters the entity handling and disbursing the pension payments, the payment amount stays unaffected. However, the net payment received by retirees may vary due to modifications in deductions or withholdings related to benefits. Fluctuations in tax rates or changes in withholding instructions, for example, could alter tax withholdings. The withholding calculation used by Athene may slightly deviate from previous methods. Current garnishments or any other legally required deductions will persist and potentially alter over time. Retirees' monthly payments will no longer include deductions for retiree health coverage, resulting in an increased monthly sum. Any existing Medicare Part B reimbursement added to the monthly payment will also cease, leading to a decreased monthly sum.

Following the switch to Athene, retirees receiving payments for retiree health coverage or Medicare Part B premiums will have to directly pay for retiree health coverage and separately receive applicable Medicare Part B reimbursement. This change solely affects how retirees' health coverage is managed, which will now be conducted through the AT&T Benefits Center. Athene will continue to handle their pension.

AT&T's transition to Athene aims at cost-effectiveness and simplified administration. Athene, an acclaimed insurance company, excels in managing financial risks related to annuity payments as part of their core expertise. Heavily regulated insurance companies like Athene ensure retirees are safeguarded against numerous risks, including investment and longevity risks.

Retirees are not required to take any immediate action. Athene will dispatch a welcome kit in July, requesting them to verify their personal information, and providing directions for making changes if necessary. For additional details, retirees can visit go.att.com/pension transfer. For any immediate queries, they can reach out to the Fidelity Service Center at 1-866-956-3115. Athene will establish contact with them in July.