AT&T agrees to $184.1 million pension settlement for 300,000 workers

AT&T agreed to pay $184.1 million to settle claims that it underpaid pension benefits to about 300,000 current and former employees, a deal filed in San Francisco federal court that still needs a judge’s approval. The proposed settlement would direct $149.1 million to additional pension benefits, including $113.5 million for retirees and $35.6 million for current employees.

The lawsuit, Scott, et al. v. AT&T Inc., was filed on Oct. 12, 2020, in the U.S. District Court for the Northern District of California on behalf of participants and beneficiaries in the AT&T Pension Benefit Plan. Workers said the telecommunications company violated the Employee Retirement Income Security Act of 1974 by using mortality data that was about 40 years old when it converted single-life annuities into joint-and-survivor annuities, a move that can lower monthly payments for married retirees and their surviving spouses. Plaintiffs also alleged the company relied on outdated interest rates. On July 9, 2025, a California federal judge said the case could proceed after workers presented evidence that the assumptions AT&T used could be unreasonable.

AT&T did not admit wrongdoing. The company said it settled to avoid the expense and distraction of prolonged litigation while remaining committed to following the law in administering its pension plan. Class counsel may seek as much as $35 million more for attorneys’ fees and costs, which would be paid in addition to the benefit payments if the court approves the agreement.

The size of the class gives the deal unusual weight. A dispute involving 300,000 people can reshape retirement income for thousands of people already living on fixed checks, while also exposing a company to years of legal and financial risk. The case has also become part of a wider wave of actuarial-equivalence litigation, as courts scrutinize whether employers are using reasonable assumptions when they convert pension promises into different forms of payment.

That pressure intensified in March 2026, when the U.S. Court of Appeals for the Sixth Circuit held in another case that ERISA requires reasonable actuarial assumptions for pension annuity conversions. Together, the rulings suggest that legacy pension formulas, especially ones built on old mortality tables, can remain vulnerable long after a plan is put in place.