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

AT&T agreed to pay $184.1 million to settle a lawsuit accusing the company of underpaying pension benefits to about 300,000 current and former workers, a deal that would send $149.1 million directly to higher retirement payments if a judge approves it. The preliminary settlement, filed in San Francisco federal court, would allocate $113.5 million to retired employees and $35.6 million to current employees, while plaintiffs’ lawyers could seek as much as $35 million in fees and costs.

The case, 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. Workers said AT&T violated the Employee Retirement Income Security Act of 1974 by using mortality assumptions that were about 40 years old, along with outdated interest rates, when converting single-life annuities into joint-and-survivor annuities under the AT&T Pension Benefit Plan.

On July 9, 2025, U.S. District Judge James Donato largely denied AT&T’s summary-judgment motion, finding material disputes over whether the company’s assumptions were reasonable and that a reasonable factfinder could conclude the conversion factors were not reasonable. In June 2022, workers sought certification of two classes.

AT&T did not admit wrongdoing. It settled to avoid the expense and distraction of prolonged litigation and remains committed to following the law in administering its pension benefit plan.