Home / How We Help / AT&T

How Do I Transition Away From AT&T?


It’s been said that all good things eventually come to an end, and the same goes for the careers we choose. That includes a career at AT&T too. AT&T knows this inevitable truth as well and has put programs in place to assist in the turnover that will come. In some cases, they will use these programs to accelerate the turnover if there is a business reason to do so. The programs that have been designed to assist with turnover and transition are called “Surplus” and “SIPP”. Each program has unique benefits for people that find themselves in different states of readiness to transition. Today we want to look at these two programs and help provide a little insight so when it is your time to make a transition away from AT&T, you’ll have the information you need to make the best decision for your unique situation.

First a little background. Once a quarter AT&T publishes a list of positions by City and State that are being declared as “surplus”. This list means AT&T is indicating the positions in a particular area they potentially intend to eliminate during the next quarter. That list is published on the 15thof the last month of each quarter, and it identifies the surplus for the following quarter. For example, the list published on December 15, 2018 identifies the positions AT&T intends eliminate for January-March 2019. This “surplus” list of positions is generally matched to employees based on seniority, meaning those with less seniority are more likely to be terminated than those with more. When an employee is selected for surplus, they are being terminated and will get 90 weeks of termination pay. The amount of termination pay depends on their job position and years of service. As an example, let’s consider a Facility Technician with 40 years of service:

Facility Technician (40 years of service) weekly termination pay = $1,441.50

90 weeks * $1,441.50 = $129,735

A large payout like that can easily place someone into a higher tax bracket, especially if they receive it later in the year when they have already had 6-9 months of regular payroll. This is why AT&T has created the “Job Bank” to assist in the transition. The Job Bank allows the option for an employee to get up to 52 weeks (out of their 90-week entitlement) of term pay as a regular-looking bi-weekly payroll. Then at the end of the 52 weeks they would officially retire and get the remaining 38 weeks of term pay as a lumpsum. The lumpsum amount is subject to a higher Federal tax withholding of 25%. The Job Bank also allows an employee to draw what looks like regular paychecks for 52 weeks, while continuing to contribute to their 401k (and get company matching contributions). It also allows their pension amount will continue to grow for up to another 52 weeks (depending on job title and years of service). Let’s consider our Facility Technician scenario from above with a Job Bank option:

52 weeks of termination pay = $74,958

Continue contributing to 401k (and receiving company match!)

Pension amount continues to build

After 1 year, receive final 38 weeks of termination pay = $54,770

Minus 37.65% Taxes (Federal: 25%, State: 5%, FICA: 7.65%) = $20,621.79

Net take home of final 38 weeks of termination pay = $34,148.21

Of course, this is depending on your unique situation, but the utilization of the Job Bank and the ability to spread the tax expense over 2 years, as well as continuing to build your 401k and pension can be a major benefit as you transition and maximize your AT&T benefits along the way.

Next, let’s review the SIPP program. This program is primarily intended for and used by the most senior employees. If you are ready to retire but just want an extra incentive to go home, you can put your name on the SIPP list during the current quarter to sign up to be a “ready taker” for the following quarter’s Surplus list. For example, if you add your name to the SIPP list on December 1, 2018, you are signing up as a “ready taker” for the 1stquarter of 2019. When the Surplus list of terminating positions is being matched to employees, the “ready takers” are considered first before other active employees. Employees that are selected off the “SIPP list” will receive a different compensation since they are “volunteering” to be terminated. Below is an example of a SIPP compensation considering our same Facility Technician with 40 years of services:

SIPP Compensation for Facility Technician (40 years of service) = $38,700

Minus 37.65% Taxes (Federal: 25%, State: 5%, FICA: 7.65%) = $14,571

Net take home of SIPP Compensation = $24,129

Again, the SIPP program is really for people that know they are ready to transition away from AT&T and by indicating they are “ready taker” will significantly increase their chances of being selected in the next surplus. The SIPP compensation can be a nice bonus when you already know you’re ready to go!

Sound Financial has spent 30+ years developing a reputation for being on the forefront of assisting AT&T employees and retirees navigate their career transition options. Contact us today for a free consultation and see how we can help you in your career transition. We would also encourage you to follow us on Facebook or LinkedIn or fill out the contact form to join our newsletter distribution list. Our goal is to partner with you as you make these challenging decisions and let us help you navigate YOUR retirement or career transition journey.


Investment Advisory Services offered through Sound Financial Strategies Group, Inc. (“SFSG”), a Registered Investment Adviser. Certain representatives of SFSG are also Registered Representatives offering securities through APW Capital, Inc., Member FINRA/SIPC, 100 Enterprise Drive, Suite 504, Rockaway, NJ 07866 (800)637-3211. SFSG and APW Capital are separate and unrelated companies. 

Neither SFSG nor APW Capital are endorsed by, retained by, or affiliated with AT&T. The opinions voiced in this article are for general information only. They are not intended to provide specific advice or recommendations for any individual and do not constitute an endorsement.

Powered by ID digital