AT&T Agrees on Settlement of Pension Miscalculation Suit

AT&T Pension Plan will pay a total of $16 million to settle a claim that it miscalculated the pension benefits owed to some non-bargained (management) retirees of certain AT&T companies who retired under a 2000 early retirement window known as the Enhanced Pension and Retirement Program. The lawsuit alleged that the SBC Pension Benefit Plan-NonBargained Program (since renamed the AT&T Pension Plan), incorrectly omitted pay earned for work performed during an averaging period used as one component in the calculation of retirees’ pensions for retirees entitled to one of several pension options, the announcement said.

In 2004, a district court agreed that the plan’s interpretation was reasonable and dismissed Plaintiffs’ claims. However, the District of Columbia Circuit Court of Appeals reversed the dismissal of the case and reinstated Plaintiffs’ claims (See Appeals Judges Revive DB Benefits Lawsuit ). Following remand, near the completion of the discovery process, the parties reached agreement on the terms of a settlement.

The net settlement benefit will be distributed to the approximately 3,800 plan participant class members and their beneficiaries on a pro rata basis. The net average additional payment, calculated as a lump sum, that each plan participant class member and his or her beneficiaries is expected to receive is approximately $2,900, according to the announcement.

The agreement must be both preliminarily and finally approved by Chief Judge Royce C. Lamberth of the United States District Court for the District of Columbia. As part of the agreement, a second case, pending in the Western District of Texas, will also be dismissed with prejudice.