AT&T Plan Hit With Class Action Over Early Retirement Benefits (1)

Employee Benefits News examines legal developments that impact the employee benefits and executive compensation employers provide, including federal and state legislation, rules from federal...

By Carmen Castro-Pagan

AT&T Inc.'s pension plan is accused of violating federal benefits law by refusing to pay retroactive, unreduced early retirement benefits to former employees.

Two former employees allege AT&T owes them about $316,490 combined in early retirement benefits they should have received between their attainment of age 55 and the date they filed their pension application in 2017, according to their lawsuit, filed July 17 in the U.S. District Court for the Southern District of New York.

They seek to represent between 40 and hundreds of individuals who may be entitled to retroactive, unreduced benefits under a 1997 plan amendment.

The lawsuit comes five years after the U.S. Court of Appeals for the Fourth Circuit ruled that a former AT&T employee, under similar circumstances as the workers who filed the new lawsuit, was entitled to recover unreduced early retirement benefits at age 55. The Fourth Circuit upheld a district court ruling that the worker was entitled to $120,000 in retroactive benefits after finding that the administrator failed to notify her of changes to the plan that made her eligible for early retirement.

The workers in the new lawsuit base their claim on the 1997 plan amendment that allowed employees to receive unreduced early retirement benefits at age 55, instead of having to wait to age 65 to receive the same monthly benefits.

They allege they had been unfamiliar with the amendment, and applied for the benefits as soon as they became aware of it. AT&T and its plan administrator, Fidelity, allegedly awarded them benefits only prospectively, but denied the retroactive pay, the lawsuit said. Fidelity cited a 2016 amendment, which AT&T allegedly adopted just days before the former employees applied for benefits, to deny them the retroactive pay, the lawsuit said.

AT&T is evaluating the matter, a company spokesman told Bloomberg Law July 18.

Edgar Pauk and Robert L. Liebross represent the retirees.

The case is Grosso v. AT&T Pension Benefit Plan, S.D.N.Y., No. 1:18-cv-06448, complaint filed 7/17/18.

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