AT&T Retirement Case Study: Pension Timing and Return to Office (RTO) Decision
Some AT&T employees may have a significant decision to make about their continued employment after a Return to Office mandate. Let's explore an example our team recently encountered.
Since COVID-19 first began impacting employment in March 2020, large companies have been confronted with the decision to have employees return to the office. For employees who have moved or have had other life changes since they began working remotely, these return-to-office mandates may not be realistic for their current circumstances. In some cases, it may force them to consider separating from that employment.
That's the case for some AT&T employees, and it's not a decision to be entered into lightly. In this piece, we'll explore a potential employment separation for an AT&T employee and how our team helped them work through the choice.
Case Study Basics
- Name: Jane
- Position: Management
- Age: 50
- Years of Service: 24
- Planning Focus: Timing Pension Eligibility and Service Credit for AT&T Retirement Benefits
AT&T Employee Chooses Pension Over RTO Relocation
Jane, a 50-year-old management employee with 24 years of service at AT&T, received a Return to Office (RTO) notice. However, she chose not to “follow the work” since doing so would have required her to relocate at her own expense—AT&T does not cover relocation costs.
Jane's original intention was to retire. She understood that by initiating the interview process, she could continue accruing service credit during the interview period. Her goal wasn’t to secure a new position but simply to extend her Net Credit Service long enough to meet full retirement eligibility.
Instead, she considered taking the AT&T severance package, but meeting AT&T’s Modified Rule of 75 was just one week away for her. By working with an advisor, she learned that she had multiple options she did not previously know about. Most critically, she came to understand the importance of reaching retirement eligibility.
Pension Difference: $157K vs. $337K in One Week
On her scheduled last day, her AT&T pension lump sum was $157,000. By reaching 25 years of Net Credit Service, that amount would increase to $337,000, a $180,000 difference.
To bridge the one-week gap, her options were:
- Secure another internal position at AT&T
- Be actively interviewing for an internal role
Jane applied for another role and completed the first interview. This made her eligible for a 30-day employment extension under AT&T policy. While the extension was unpaid, she remained classified as an active AT&T employee, which allowed her to accrue additional service time.
AT&T issued the 30-day extension letter the day before her original separation date. She reached her 25th service anniversary during that time, qualified under the Modified Rule of 75, and left the company with the higher pension benefit.
Key Takeaways for AT&T Employees Considering Severance or Retirement
- Actively interviewing for an internal role at AT&T may trigger a 30-day unpaid extension, extending service time and helping employees reach key benefits milestones.
- Running a pension projection for multiple exit dates can show major financial differences.
- Employees with close to 25 years of Net Credit Service or the Modified Rule of 75 should carefully evaluate severance timing, internal job options, and pension eligibility.
Need Help With an AT&T Retirement Decision?
To learn more about your options and how to optimize your AT&T pension and retirement benefits, book an appointment with the Farther Focus Team. We are available to help you navigate your situation and plan effectively for the future.
