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New Accounting Rule Could Cost DoD Billions
February 27, 2012 — DefenseNews.com
Washington, D.C.-based Government Contracts Group partner Terry L. Albertson speaks to DefenseNews.com about an accounting rule that requires the U.S. government to reimburse its contractors to a far greater degree for their employee pension costs. The new rule stems from the 2006 Pension Protection Act, which set new accounting standards for companies to use in calculating their pension fund liabilities.
According to Albertson, "Contractors are required to fund their employee pension plans according to the federal Pension Protection Act standards. But until now, federal cost accounting rules have calculated pension costs at a lower rate, meaning contractors have been unable to recoup all those costs from the government."