A U.S. District Court judge in San Francisco dismissed a lawsuit against AT&T Inc. accusing the firm of undercalculating early retirement benefits for participants in its defined benefit plan.
On Monday, U.S. Magistrate Judge Sallie Kim granted the defendants' motion to dismiss Amy Eliason et al. vs. AT&T Inc., arguing that the plaintiffs' arguments in the complaint were "internally inconsistent and illogical."
The suit, filed Oct. 1, 2019, alleged that AT&T's calculations for offering early retirement benefits and joint and survivor annuity benefits resulted "in plan participants receiving less than the actuarial equivalent of their vested accrued benefit as required by ERISA."
The calculations for these benefits fell below the calculations for a "normal retirement age," which is age 65 for the AT&T Pension Benefit Plan, the participants wrote. For an employee leaving at the normal retirement age, the benefit is a monthly payment via a single life annuity.
The complaint said AT&T violated ERISA rules because the plan's early retirement payments weren't actuarially equivalent to the payments for normal retirement payments and that the formula for calculating early retirement benefits and the joint and survivor annuity were outdated.
The defendants filed a motion to dismiss the case, arguing that the plaintiffs failed to demonstrate injury "based on the application of the Early Retirement or Joint and Survivor Annuity Factors," Ms. Kim wrote in her decision. "Defendants contend that their benefit calculations were based on ... an actuarially appropriate method for ERISA purposes."
The AT&T Pension Benefit Plan had $55.5 billion in assets as of Dec. 31, according to the firm's most recent 10-K filing.