AT&T Severance Offer - You MUST Understand the Modified Rule of 75

If you are given an offer or severance at AT&T, it is important to understand the Modified Rule of 75 BEFORE accepting the offer.

As a recruiter placing telecom workers, we see many AT&T people who transition or retire from AT&T but are unaware of the specific details of this rule. I attended seminar this summer on the subject of Mod-75 so let me share with you what I learned.

Having 75 points does not necessarily make you an official “retiree” under the classification of benefits. You must hit the rules as laid out in the AT&T Summary Plan Description(SPD). Will these dental, medical and life insurance benefits be competitive to those you received while you were an active employee…

Here are a few examples of the varying types of retirement —

1) I’m done working and don’t intend to seek another job, so I’m “retired.”

This is significant, but it doesn’t mean you’re qualified to collect a pension, social security or qualify for retiree discounted services through the company.

2) I’m 65, and I plan on retiring. 

Congratulations, at the age of 65 you deserve to retire. In the eyes of the federal government, you are officially “retired”, but this is not the case at AT&T. To AT&T, unless you have worked for at least 10 years, you simply don’t become an official “retiree” with retiree benefits” with a retirement party and retiree discounts. Even though the government may say so, to AT&T, you must meet certain qualifications to be considered a “retiree”.

3) I intend to leave the company, I’m not retiring from work, but I am an official retiree.

This category pertains to me. I’m too young to be retired as in done working/earning, collecting social security and a pension but am at an age I wouldn’t typically consider retiring at. This just means I have qualified through the retiree criteria by AT&T and will leave with retiree benefits.

AT&T Retirement Benefits

It is significant to note that the reference to retiree benefits for the intention of this conversation has nothing to do with pension money, 401K or social security. It’s intention is to determine medical and dental insurance and in some cases, life insurance provided at subsidized levels for eligible retirees. In addition, any product/service discounts provided by AT&T to those who qualify is comprised in the “retiree benefits”.

In order to retire from AT&T and receive these particular retiree benefits, you must meet the criteria of what’s called the “modified rule of 75.” It was initially refered to as the “rule of 75” but it was then changed along the way some years ago, hence the addition of “modified.”

AT&T’s Modified Rule of 75

An individual is deemed eligible for retirement benefits through the modified rule of 75 when a person’s age plus years of service totals 75. Important to consider that only net credited service counts, for example if you were employed for the company for 15 years, but took a 12-month leave of absence, then your years of service would be 14 instead of the 15 as leave of absences “stop the clock” on any pension accumulation.

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