AT&T Justified in Pension Porting Denial

June 1, 2010 ( – A federal judge has ruled that AT&T was within its rights to refuse “porting” rights to a worker who wanted pension credit for 16 years he worked for Paradyne Corp.

U.S. District Judge Orlando L. Garcia of the U.S. District Court for the Western District of Texas threw out plaintiff John J. Monaghan’s claim after ruling AT&T had correctly denied Monaghan’s demand for pension portability rights. The plan was correct in determining the Paradyne was not an “interchange” company as described in a “mandatory portability agreement (MPA).”

According to the court, the MPA was entered into by AT&T and several so-called “interchange companies” that were spun off from AT&T in 1985. The MPA was designed to provide for the recognition of service credits and transfer of pension obligations of individuals moving from one interchange company to another.

Paradyne was not one of the “interchange companies” and because of this, AT&T determined that Monaghan was not a covered employee who was eligible for porting, the court found.

The opinion said Monaghan began working for Paradyne in 1980; the company was purchased nine years later by AT&T.  At the time of the purchase, AT&T Paradyne employees became participants in a defined benefit plan sponsored by AT&T.

Monaghan earned 16 years of credit under the AT&T plan when he resigned from AT&T Paradyne in 1995 and began working for Ameritech Corp., a Regional Bell Operating Company. Monaghan had not yet reached retirement age so his benefits remained in the AT&T plan.

A series of corporate communications M&A deals ensued, leaving Monaghan with a deferred vested pension benefit in the Lucent plan based on his 16 years of service with Paradyne, the court said.

The case is Monaghan v. AT&T Inc., W.D. Tex., No. SA-09-CA-86-OG.