Most AT&T pension participants get a real choice at retirement: a lump sum or a monthly annuity. Here's how to weigh it with 2026 numbers.
Where the AT&T pension stands
AT&T's pension programs for U.S. management employees are closed to new entrants. They still cover people generally hired before January 1, 2015, under either a cash balance formula (pay credits plus interest credits) or a traditional formula based on a stated percentage of adjusted career income. Nonmanagement employees in the Communications business earn pensions under a flat dollar amount per year of service by job classification or a cash balance formula with negotiated pension band credits. AT&T's 10-K says most employees can choose a lump sum or an annuity.
Lump sums and insurer transfers
On April 26, 2023 AT&T agreed to buy group annuity contracts from Athene for the AT&T Pension Benefit Plan, transferring $8.067 billion of obligations. The deal closed May 3, 2023 and covers about 96,000 participants and beneficiaries. Athene took over their payments starting with the August 2023 pension payment, and the amounts didn't change.
How to decide
The annuity is worth more the longer you live, and it protects a spouse if you choose a survivor form. The lump sum keeps the money in your control and passes to heirs. If you take it, a direct rollover to an IRA avoids the mandatory 20% federal withholding on a check paid to you. Run both options through the lump sum vs. annuity calculator with your own benefit before the election deadline.
What a lump sum is worth in 2026
When a private plan pays a lump sum, it can't be smaller than the IRS 417(e) present value. Plans that use November rates for 2026 apply the November 2025 segment rates: 4.07% for payments in years 1 to 5, 5.15% for years 6 to 20 and 6.01% after that, with the IRS 2026 mortality table from Notice 2025-40. On those inputs, a $3,000 monthly benefit starting at 65 has a minimum lump sum of about $442,500. Your plan's lookback month can differ, so check your Summary Plan Description, and run your own benefit through the lump sum calculator.
PBGC coverage
Benefits still in a private single-employer plan are insured by the PBGC. For a plan that terminates in 2026, PBGC guarantees up to $7,789.77 a month for a straight-life annuity starting at 65, less for earlier starts or survivor forms. Benefits moved to an insurer leave the PBGC system and rely on the insurer and state guaranty associations instead.
Social Security
AT&T jobs paid into Social Security, so the Windfall Elimination Provision never applied to these pensions, and WEP was repealed anyway for benefits payable after December 2023. If the pension covers your basic expenses, delaying Social Security toward 70 raises the one income source that adjusts for inflation. Model it with the Social Security calculator.
The AT&T employer page lists the filings behind every date and dollar figure here.