DoD Issues New Guidance on Allowability of Pension Costs

Earlier this week, the Department of Defense issued new guidance to contracting officers on how to implement the CAS Board's (Cost Accounting Standards Board) new rules for projecting pension costs in forward pricing proposals.

The new rules cover defined benefit pension plans covered by CAS  412 and 413. The rules also apply to non-CAS covered contracts since FAR 31.205-6(j) requires the use of CAS 412 and 413 to measure, assign, and allocate allowable pension costs.

This new guidance affects contracts awarded after February 27, 2012.

The number of contractors with defined benefit pension plans is relatively small and getting smaller all of the time. But if your company has one (and you allocate pension costs to Government contracts), you need to read and comply with the new guidance.

You can download it here.