[Federal Register Volume 77, Number 143 (Wednesday, July 25, 2012)]
[Rules and Regulations]
[Pages 43542-43543]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-17265]


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OFFICE OF MANAGEMENT AND BUDGET

Office of Federal Procurement Policy

48 CFR Part 9904


Cost Accounting Standards: Cost Accounting Standards 412 and 
413--Cost Accounting Standards Pension Harmonization Rule

AGENCY: Cost Accounting Standards Board, Office of Federal Procurement 
Policy, Office of Management and Budget.

ACTION: Technical correcting amendments.

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SUMMARY: The Office of Federal Procurement Policy (OFPP), Cost 
Accounting Standards Board (Board), is publishing technical corrections 
to the final rule that revised Cost Accounting Standard (CAS) 412, 
``Composition and Measurement of Pension Cost,'' and CAS 413, 
``Adjustment and Allocation of Pension Cost'' for the CAS Pension 
Harmonization Rule, published on December 27, 2011. Some illustrations 
in that document are not consistent with their corresponding Table or 
text, or the text used in the two effective date provisions is not 
consistent with each other in the amendment language. This document 
corrects the final regulations by revising the applicable sections 
accordingly.

DATES: Effective August 24, 2012.

FOR FURTHER INFORMATION CONTACT: Eric Shipley, Project Director, Cost 
Accounting Standards Board (telephone: 410-786-6381).

SUPPLEMENTARY INFORMATION: These are the technical corrections to the 
final rule that revised Cost Accounting Standard (CAS) 412, 
``Composition and Measurement of Pension Cost,'' and CAS 413, 
``Adjustment and Allocation of Pension Cost'' for the CAS Pension 
Harmonization Rule. The final rule was published at 76 FR 81296 on 
December 27, 2011. Generally, the technical corrections make the 
following adjustment: (1) Revise the text of the illustrations to make 
them consistent with the contents in the corresponding Tables, (2) 
revise the text of the effective date provisions at 9904.412-63 and 
9904.413-63 to make them consistent with each other and internally 
consistent for the CAS Pension Harmonization Rule, and (3) revise an 
illustration so that it is consistent with the rule. A brief 
description of each technical correction is as follows:
    1. In 9904.412-60.1, in paragraph (b)(2)(i) (CAS Pension 
Harmonization Rule, Measurement of Pension Costs, Liabilities and 
Normal Costs), in Table 3--Actuarial Accrued Liabilities and Normal 
Costs as of January 1, 2017, delete a duplicate reference to Note 2 in 
the ``Notes'' column for ``Expense Load on Normal Costs;'' and in 
paragraph (c)(3)(ii) (CAS Pension Harmonization Rule, Assignment of 
Pension Costs, Measurement of Tax-Deductible Limitation on Assignable 
Pension Cost), after Note 6 to Table 10, correct the amounts of the 
9904.412-50(c)(2)(iii) limitation in the text of the illustration so 
that they are consistent with the corresponding amounts in Table 10--
CAS 412-50(c)(2)(iii) Tax-Deductible Limitation as of January 1, 2017.
    2. In 9904.412-63(b) Effective date in the first sentence, replace 
``receipt'' with ``award'' as that is the more common terminology for a 
contract award, and make the CAS 412 text consistent with the 
corresponding text at 9904.413-63(b) for a uniform Effective Date for 
the CAS Pension Harmonization Rule (which is comprised of changes to 
both CAS 412 and 413).
    3. In 9904.412-64.1(c)(1)(i)(B) (Transition Method for the CAS 
Pension Harmonization Rule, Transition Illustration), correct the text 
of the illustration so that it is consistent with corresponding amounts 
in Table 1--Development of Transitional Minimum Actuarial Liability for 
Fourth Transition Period; and in 9904.412-64.1(c)(1)(i)(C), in Table 
1--Development of Transitional Minimum Actuarial Liability for Fourth 
Transition Period, add a new label ``Actuarial Accrued Liability'' 
beneath the label ``Minimum Actuarial Liability.''
    4. In 9904.413-60(b)(3) (Illustrations, Valuation of the assets of 
a pension plan) after the first sentence, correct the

[[Page 43543]]

text of the illustration so that it is consistent with the rule.
    5. In 9904.413-63(b) Effective date in the first sentence, replace 
``receipt'' with ``award'' as that is the more common terminology for a 
contract award, and make the CAS 413 text consistent with the 
corresponding text at 9904.412-63(b) for a uniform Effective Date for 
the CAS Pension Harmonization Rule (which is comprised of changes to 
both CAS 412 and 413).

List of Subjects in 48 CFR Part 9904

    Government procurement, Cost accounting standards.

    Accordingly, Chapter 99 of Title 48 of the Code of Federal 
Regulations is corrected by making the following correcting amendments:

PART 9904--COST ACCOUNTING STANDARDS

0
1. The authority citation for part 9904 continues to read as follows:

    Authority: Pub. L. 111-350, 124 Stat. 3677, 41 U.S.C. 1502 
[formerly Pub. L. 100-679, 102 Stat 4056, 41 U.S.C. 422].


9904.412-60.1  [Amended]

0
2. Amend 9904.412-60.1 as follows:
0
a. In paragraph (b)(2)(i), Table 3, in the column labeled ``Notes,'' 
under the entry ``Expense Load on Normal Cost,'' remove the first 
``2''.
0
b. In paragraph (c)(3)(ii), in the first sentence, remove 
``$2,716,649'' and add ``$2,741,313'' in its place; and in the second 
sentence, remove ``$12,958,048'' and add ``$12,933,384 in its place.

0
3. In 9904.412.63(b), revise the first sentence to read as follows:


9904.412-63  Effective Date.

* * * * *
    (b) Following the award of a contract or subcontract subject to 
this Standard on or after the Effective Date, contractors shall follow 
this Standard, as amended, beginning with its next cost accounting 
period beginning after the later of the Implementation Date or the 
award date of a contract or subcontract to which this Standard is 
applicable. * * *
* * * * *


9904.412-64.1  [Amended]

0
4. Amend 9904.412-64.1 as follows:
0
a. In paragraph (c)(1)(i)(B), in the second sentence, remove 
``$14,115,200 ($14,087,750 + [75% x ($183,000)])'' and add 
``$14,087,750 ($14,225,000 + [75% x ($183,000)])'' in its place; and
0
b. In paragraph (c)(1)(i)(C), in Table 1--Development of Transitional 
Minimum Actuarial Liability for Fourth Transition Period, add a new 
label ``Actuarial Accrued Liability'' beneath the label ``Minimum 
Actuarial Liability'' in the same format as the other labels, and on 
the same line as the entries ``(2,100,000)'' and ``(14,225,000)'' under 
the headings ``Segment1'' and ``Segments 2 through 7,'' respectively.

0
5. In 9904.413.60(b)(3), revise the second, third, and fourth sentences 
to read as follows:


9904.413-60  Illustrations.

* * * * *
    (b) * * *
    (3) * * * Based on the contractor's assumed interest rate of 8% 
which complies with 9904.412-40(b)(2) and 9904.412.-50(b)(5), the 
contribution is discounted for the six-month period from January 1, 
2017 to July 1, 2017. For contract cost accounting purposes, the 
contractor measures $96,225 as the present value (PV) of the $100,000 
contribution on January 1, 2017 (discounted at 8% per annum for one 
half year using compound interest, i.e., Net PV = $100,000/1.08\0.5\), 
and therefore recognizes $10,096,225 as the market value of assets as 
required by 9904.413-50(b)(6)(ii). The actuarial value of assets on 
January 1, 2017, must also reflect $96,225 as the present value of the 
July 1, 2017, contribution of $100,000.
* * * * *

0
6. In 9904.413.63(b), revise the first sentence to read as follows:


9904.413-63  Effective Date.

* * * * *
    (b) Following the award of a contract or subcontract subject to 
this Standard on or after the Effective Date, contractors shall follow 
this Standard, as amended, beginning with its next cost accounting 
period beginning after the later of the Implementation Date or the 
award date of a contract or subcontract to which this Standard is 
applicable. * * *
* * * * *

Joseph G. Jordan,
Chair, Cost Accounting Standards Board.
[FR Doc. 2012-17265 Filed 7-24-12; 8:45 am]
BILLING CODE 3110-01-P