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AT&T, Unions Reach Contract Deal
Dow Jones Newswires
The Wall Street Journal
Monday, December 12, 2005

WASHINGTON -- AT&T Inc. reached an agreement with two unions, granting 11,000 pre-merger employees new three-year, four-month agreements.

The telecommunications company, which was formed when telecommunications company SBC Communications Inc. acquired AT&T Corp. in November, said in a press release Sunday that the agreements reached with the Communication Workers of America and the International Brotherhood of Electrical Workers provide for four annual base wage increases at 11.2%, compounded, over the life of the contracts.

Pension benefits were increased by 6% in 2006 and by an additional 5% in 2008.

Employee co-payments and maximum out-of-pocket limits were increased for medical and prescription drug benefits for employee and retiree coverage.  The retiree healthcare cap on company contributions, which was increased to $9,000 a retiree, provides that no retiree will contribute toward the point of service or traditional indemnity options during the term of the agreements.

AT&T said the agreements help the company control healthcare cost but don't require monthly contributions.

The company also said an agreement was reached that, before being laid off, AT&T will offer employees a position at the company.

Ratification will take place over the next several weeks.

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