If you’re an AT&T bargained employee, an important change is coming to your retirement benefits. AT&T is transitioning employees from the Savings and Security Plan (SSP) to the Retirement Savings Plan (RSP), the 401(k) plan already used by AT&T management employees.
This blog covers what you need to know during this transition period, from updating your beneficiaries to reviewing new contribution and investment options.
Key takeaways:
This change represents a shift for employees currently enrolled in the legacy 401(k)-style savings account (SSP) to the standardized plan format (RSP) that is used more widely around the organization.
For some employees, including many in the Southwest regions, this transition is already underway. For others, this transition is expected to continue into 2027.
While your existing retirement savings will move with you, there are several important differences between the SSP and RSP that could affect your retirement account moving forward. To ensure the smoothest transition, follow the four steps below.
One of the most important things to know about the transition is that your current beneficiaries will not carry over from the SSP to the RSP.
Once your account transitions, you’ll need to go into the new plan and designate your beneficiaries again.
This may seem like a small administrative task, but it’s an important one. Your beneficiaries designate who receives the assets if something happens to you. Passing away without any (or incorrect) beneficiary information can create tremendous stress for your loved ones – both financially and emotionally.
Even if you knew your beneficiaries were correct before the transition, make updating and verifying them one of the first items on your checklist after the transition.
The transition also brings changes to the ways you can contribute to your AT&T 401(k).
Under the SSP, employees have pre-taxed and after-tax contribution options. Once you transition to the RSP, you’ll also have access to Roth contributions.
With traditional pre-tax contributions, you generally receive the tax benefit today and pay taxes when you withdraw funds once you are retired. Roth contributions work differently; you contribute money after taxes, but qualified withdrawals can be tax-free in retirement.
That doesn’t necessarily mean Roth contributions are the better choice for everyone. Whether pre-tax, Roth, or a combination makes sense can depend on factors such as your current tax situation, expected retirement date and long-term financial goals.
If you would like to learn more about the differences between a Roth or traditional IRA to help you make your determination, read our blog here.
Your investment options may also look different under the new RSP plan. You’ll still have access to the investments you previously had within the SSP, but the RSP will introduce additional options to consider.
You may also notice that your account defaults to a target-date fund. A target-date fund can offer a convenient, diversified approach based roughly on when you expect to retire.
However, that doesn’t automatically mean the default investment is the best fit for your individual situation. Your investment mix should align with your retirement timeline, risk tolerance, pension, and overall financial plan.
Rather than simply accepting the default, use the transition as an opportunity to review your overall investment strategy.
The last significant change of this transition involves how AT&T calculates its company match to your 401(k).
Under the RSP, the company match will move away from a flat-dollar amount and become percentage-based. With this new structure, AT&T will match up to 80% of the first 6% of basic contributions. For example, if you make $70,000 a year and contribute 6%, that’s $4,200 for you. AT&T would then add 80% of that, or $3,360.
Which means, if you want to optimize the AT&T company match, you will want to consider contributing at least 6%.
This doesn’t mean you are limited to a maximum of 6% ─ the more you can contribute comfortably, the better. If you haven’t reviewed your contribution rate recently, this change provides another reason to take a closer look.
The transition from the AT&T Savings and Security Plan to the Retirement Savings Plan is more than just a change in plan names. It introduces new choices that could affect how you save and invest for retirement.
For AT&T employees approaching retirement, this can also be a good opportunity to look beyond your 401(k) – including your pension, Social Security benefits, taxes, and how all these fit together into your retirement timeline.
A financial adviser can help by reviewing all of these pieces, as well as your short- and long-term goals, and provide guidance on a comprehensive retirement plan.
Click here to speak with an adviser who is experienced in working with AT&T employees and retirees.