Monthly pensions provide a reliable income source, but who manages them may change. Companies often transfer pension responsibilities to third parties to reduce costs and investment obligations. AT&T's recent pension transfer of $8.1 billion in liabilities to Athene is an example.
This article delves into what an AT&T pension transfer means:
Who's Affected by an AT&T Pension Transfer?
These transfers often involve retirees with monthly benefits below a certain threshold. In this case, around 96,000 AT&T retirees receiving less than $2,200 monthly are impacted. Those affected have been notified by AT&T Benefits.
What Changes for AT&T Retirees?
While the entity handling payments changes, the payment amount remains the same. Athene will take over payments, starting with the August pension payment. Retirees will receive a welcome kit from Athene in July, outlining any necessary steps.
If your pension currently covers health coverage or Medicare Part B premiums, these aspects will be administered differently, but your pension itself remains secure.
Why Transfer Pension Obligations?
Companies make these transfers to enhance participant security, reduce costs, administrative duties, and financial risks. It's often done when interest rates increase, shrinking pension liabilities.
Is Your Pension Secure?
For retirees affected by the transfer, Athene is a well-rated insurance company specializing in managing annuity payment risks. Additionally, state guaranty associations offer protection, and government regulations ensure benefit security.
In summary, if the AT&T pension transfer affects you, rest assured that your pension payments will continue as usual, albeit from a new provider. If you're an AT&T employee planning for retirement, consider meeting with an AT&T-experienced financial adviser for personalized guidance.