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AT&T will boost pension fund with $9.5 billion equity stake
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Thu, Oct 18 2012
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Wed, Oct 17 2012
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Essential reading: Chicago faces additional pension bill of $1.5 billion a year, and more
Fri Oct 19, 2012 2:42pm EDT
(Reuters) - AT&T said on Friday it will contribute a stake in its wireless business to the company's pension plan worth $9.5 billion in an effort to secure the fund, according to a U.S. Securities and Exchange Commission filing.
AT&T filed for approval for the proposal with the U.S. Department of Labor on Thursday. It said the move would not significantly affect company earnings.
AT&T's pension plan was underfunded by about $10.2 billion at the end of 2011, a company spokeswoman said.
"We're making this contribution, which is many times above our estimated required funding for 2013, at a time when many companies have eliminated their pensions," the spokeswoman said.
The proposal comes after rival Verizon Communications Inc said on Wednesday that it will transfer $7.5 billion in pension obligations to insurer Prudential, removing a quarter of its long-term employee retirement burden with a single upfront payment.
The move follows a similar deal that General Motors Co did with Prudential earlier this year.
(Reporting by Nicola Leske; Editing by Leslie Gevirtz)
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