At&t accused of shortchanging 300,000 employees in pension payments

AT&T is facing a class-action lawsuit from over 300,000 current and former employees who claim the company shortchanged their pension payments. The plaintiffs accuse AT&T of using outdated mortality data from 40 years ago to calculate benefits, resulting in married workers receiving less than their single counterparts.

Proposed settlement filed in federal court

A preliminary settlement of $149.1 million has been filed in San Francisco federal court, which could provide up to $497 to each of the 300,000 employees if approved. The funds will be distributed between current and retired employees, with $113.5 million going to retirees and $35.6 million to current workers. Lawyers representing the plaintiffs are seeking $35 million in fees and costs.

AT&T denied any wrongdoing but chose to settle the case to avoid prolonged litigation expenses and distractions. The company maintains it is committed to following the law when administering its pension plan.

The lawsuit, filed in October 2020, alleges that AT&T's failure to update its mortality tables led to incorrect payments. The plaintiffs contend this violated ERISA rules requiring equal benefits for single and married employees.

Once the judge affirms the preliminary settlement, a notice will be sent to class members and a final hearing scheduled. The outcome is expected to close the case.

The controversy has little impact on AT&T's financial health, as the $149.1 million payout is a small fraction of the company's overall resources.