NEW YORK (AP) — AT&T Inc., the largest phone company in the U.S., on Friday said it is seeking government approval to contribute a stake in its wireless business worth $9.5 billion to the trust that pays pension benefits for its 360,000 retirees.
AT&T's pension plan was underfunded by about $10.2 billion at the end of last year. If approved by the Department of Labor, the move would extinguish most of that liability by transferring equity in the company from shareholders to the pension fund.
The shares would entitle the fund to cash dividends of about $560 million per year. AT&T promises that if it can't come up with the cash, it will suspend its dividend to regular shareholders and stop share buybacks.
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