If you work for AT&T and are entering your retirement years this information will apply to you specifically.

AT&T History

AT&T has a complicated history of breaking up and merging back together. In 1984 the giant corporation was split into regional telecommunications companies known as the "Baby Bells." Since the break-up, these companies have merged once again to form the present-day AT&T.  Due to AT&T's mergers, understanding the complexities of the pension plans can be a challenge. Click the button below to schedule a follow up call with an AT&T specific advisor here at The Retirement Group.

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Service Pension Eligibility & Calculation

The Modified Rule of 75 is essentially a formula used by AT&T which helps the company establish a worker's benefits, including their pension & certain medical benefits.


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It is crucial for AT&T employees to be familiar with the modified rule of 75 as it will dictate how much you receive when you commence your benefits. At AT&T your pension is considered vested after five years with the company; however, you will be heavily penalized if you leave before meeting AT&T’s years of service and age requirements.

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How it Works

All of the following would meet these requirements: 25 YOS + 50 Age, 20 YOS + 55 Age, 10 YOS + 65 Age, OR 30 YOS + Any Age. It is important to keep in mind that if you only meet one of the above thresholds you will not qualify for the modified rule of 75. For example a person with 26 years of service who is 49 years old will not qualify because they only meet the years of service requirement, but not the age requirement.

If you have less than 30 years of service as an AT&T management employee, even if you qualify for Mod-75, you will be penalized for taking your pension before you are 55 years old.

AT&T employees who meet the Mod-75 requirements may also qualify for subsidized benefits, like life insurance, vision dental & retiree medical; however, some of these benefits were cut or reduced in recent years.

Employees who are pension eligible but do not currently meet the Mod-75 requirements will receive their pension benefits at age 65. If you choose to take your pension before age 65 there will be significant penalties.

"You are eligible for a vested pension benefit after five years of service," silhouette of electric towers

There are many different plans available from AT&T. We will outline how the Craft & Management pension plans work because the majority of employees fall under these plans. Let's take a look at a timeline example for Joe Smith:

Craft Pension Plan

In 1990, Joe is hired by AT&T and participates in the Craft Pension Plan:

Craft has a defined benefit plan that uses pension bands. A pension band determines your benefits based on your job title/grade level/occupation. Joe will receive a monthly dollar amount into his account for each year of service. Joe's benefit (pension band) may change yearly.

Management - Cash Balance Account

In 1997 Joe Smith switches to Management and participates in the Cash Balance Account:

After 5 years of service Joe will be fully vested with no term age penalties. If he receives salary increases, this will affect the calculation of his final benefit. Joe will receive his benefit in the form of a Lump Sum, upon retirement. In May of 2002 this account type was frozen by AT&T.

CAM Pension Plan

In 2001, Joe starts his CAM pension plan:

Assume $0 opening balance as he came from Craft Joe was hired before 6/12/01 so he is fully vested and eligible immediately. Joe's pension benefit may decrease during his early 60's due to life expectancy. (Misconception: When you hit 30 years of service pension benefit decreases) Early retirement discounts & penalties may apply, but not if Age 55 with 30 years.

Joe Smith's Pension Plan

This is a typical/generic example for how your benefit works, however each of you have different scenarios in which hire dates, years of service, age, salary, job, and more will affect your plan. The retirement group has worked with numerous AT&T employees, so our experts will be able to work through the specifics with you so you can get the greatest benefit.

silhouette of buildings under cloudy sky during sunset "If you leave the company and come back, your NCS is not instantly credited from the day you return."

Are you Craft or Management?

Have you taken an extended leave from the company and come back thus bridging your service? Did AT&T give you a new NCS date? Well anytime you are dealing with bridging issues, it can complicate your pension calculations. Often Fidelity will not be able to provide you a pension estimate online and you’ll have to order manual calculations.

There are various rules regarding bridging. One important thing to know is that if you leave the company and come back, your NCS is not instantly credited from the day you return. There is a waiting period until you can take credit for your years of service during your second tenure.

In terms of changing from Craft to Management, or vice versa, you will end up with two pensions and two 401(k)s. We will make sure that we maximize every account that you have and not leave anything out.


Please call The Retirement Group at (800)-900-5867 or click the button below for more information and we can help you get in front of an AT&T focused advisor.


This information should not be construed as investment advice. Neither the named Representatives nor Broker/Dealer gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. The publisher is not engaged in rendering legal, accounting or other professional services. If other expert assistance is needed, the reader is advised to engage the services of a competent professional. Please consult your Financial Advisor for further information or call 800-900-5867.

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Tags: Financial Planning, Lump Sum, Pension, Retirement Planning, AT&T