The Labor Department has cleared changes AT&T made to a $9.21bn pension contribution in 2018, and the window the clearance covers closed in 2023
Every transaction this exemption covers is already finished.
The Employee Benefits Security Administration filed a notice for public inspection on Friday morning amending prohibited transaction exemption 2014-06, the relief that allowed AT&T to contribute approximately $9.21bn of employer securities and other assets to the AT&T Pension Benefit Plan. What the amendment permits is a set of modifications to the terms governing how the plan held and disposed of those securities, which the document calls the Preferred Interests. The modifications were made in 2018. The relief this amendment adds runs from 15 October 2018 through 5 April 2023, and it was signed on 21 July 2026.
Without it, the department states, the modifications would have violated the prohibited transaction provisions of the Employee Retirement Income Security Act of 1974, the Internal Revenue Code of 1986, or both.
What the plan received
Eighty million dollars.
AT&T paid that cash to the trust no later than 15 October 2018, solely in connection with the modifications, and the department carries the payment as a condition of the relief as well as its benefit. The other stated benefit is transferability. Five things changed at once: the interests became transferable by the plan and by every subsequent holder without AT&T's prior approval, any holder gained a put option requiring AT&T to buy them, AT&T's redemption option was updated, the exercise periods for both were confined to fixed windows inside each fiscal quarter, and the terms under which AT&T would have to register more common stock, where it settled an exercise in kind, were modified.
The windows are narrow and they do not overlap. A put may be exercised in the first 15 business days and the last 15 business days of a fiscal quarter. A redemption may be exercised from the 26th business day to the 35th.
The numbers underneath
The interests carried distribution rights of $1.75 each, which the document puts at $560m a year in cash payable to the trust as measured on the date of the contribution. Fair market value under the exemption is built on $25.00 per interest plus any accrued and unpaid distributions and market conditions at the time, with a second formula adding the present value of future distributions through 9 September 2022 where an option was exercised before that date.
A contingent event could pull that earlier formula forward. The document defines one three ways: the first date the issuer's debt to total capitalisation ratio exceeds AT&T's own, the date AT&T is rated below investment grade for two consecutive quarters by at least two of S&P Global Ratings, Moody's and Fitch, or a change of control.
Who was in it, and who objected
Nobody objected. The department proposed the amendment on 17 March 2026 and gave interested persons until 17 June to comment or ask for a hearing, and it records receiving no substantive comments and no request for a hearing at all.
Brock Fiduciary Services LLC is the independent fiduciary. JPMorgan Chase Bank is the directed trustee under the amended and restated contribution agreement dated 15 October 2018, and the securities themselves are preferred interests in AT&T Mobility II LLC. The notice is signed by Christopher Motta, acting director of the Office of Exemption Determinations.
