While there is no current scheduled approval deadline, the Wall Street Journal reported AT&T has received tentative approval from the U.S. Department of Labor to contribute up to $9.5 billion of preferred equity, in its’ mobility business, to its pension plan. The contribution would bring the pension plan close to 100% funding. The Labor Department posted a “notice of proposed exemption” on Friday, which said AT&T could be permitted to surpass federal limits that prohibit a company from placing more than 10 percent of its own shares into its pension plan. The proposal is now open for public comment. If approved, it would be effective retroactively. See attached AT&T notification for reference.
Wall Street Journal -
“In addition, AT&T Inc. got tentative approval from the U.S. Labor Department last week to make a pension-fund contribution of 320million perpetual preferred shares in its mobility business, at a value of up to 9.5billion. The AT&T deal is expected to bring the pension fund close to fully funded status and lower the company’s taxes. Final approval could open the door for other companies to use the same approach. It’s a novel way to address some of these pension issues, and if other companies have an asset like this they could review it said John Culver, an AT&T analyst at Fitch Ratings in Chicago.”
Citations: Chasan, Emily. “Perpetual Stock Piques Interest.” The Wall Street Journal [New York City] 10 September 2013: B8. Print.
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