AT&T Inc., which recently merged with SBC Communications, said on Sunday it had reached an agreement for a new contract with the union representing some 11,000 employees of the pre-merger AT&T.

The Communications Workers of America had authorized a strike if the company and union could not reach agreement on a new contract.

According to the union, one point of contention in the contract negotiations was retiree health care benefits. The new contract will increase the company contribution to retiree health care plans to $9,000 per year.

The contract also provides for four annual base wage increases totaling 11.2 percent, pension increases of 6 percent in 2006 and 5 percent in 2008, and a guarantee that AT&T will offer employees a new position at the company before layoffs.

The new contract, once ratified, will be in effect through April 4, 2009.

Ralph Maly, CWA’s vice president for Communications and Technologies, said the new contract was “fair and equitable” and that union workers at AT&T “are looking forward to working with the new AT&T.”

The union membership must now ratify the new contract. A date has not yet been set for voting on the new contract.