[Federal Register Volume 77, Number 143 (Wednesday, July 25, 2012)]
[Rules and Regulations]
[Pages 43542-43543]
From the Federal Register Online via the Government Publishing 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]
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