In 4Q, AT&T to record Billions as Charges Related to Pension

In 4Q, AT&T to record Billions as Charges Related to Pension On Friday, AT&T said that the company will see $7.9 billion noncash, pre-tax loss in the fourth quarter, which is connected to a modification done with the assumptions that linked to its pension plan.

On December 31, in an announcement the company said that, it had adjusted its supposed discount rate for the company's pension obligation to 4.3%. Earlier it had calculated a five percent discount rate.

The discount rate is used for measuring a pension commitment which the company presupposes as the pension fund which will return over a period of time so that that it can meet its obligations. Trimming this rate on the whole implies that, the pension fund of AT&T is now expected to yield lower than the amount which was previously assumed. Therefore to meet the requirements the company requires adding in extra capital to the fund for meeting the future obligations.

The company mentioned that the losses were also due to "updated mortality assumptions" which simply means that the people who are covered under the pension plan of AT&T are living longer under present assumptions.