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Board Finds Liability For Constructive Receipt of Pension Plan Assets at Plan Merger


Determining entitlement on an appeal by ICI Americas, Inc. (May 23, 2007,, of an Army claim for $80 million in surplus pension assets, the ASBCA held that (1) until a contractor “receives” (meaning “to take possession or delivery of”) money, the government has no basis for recovery of a credit under the credits clause, FAR 31.201-5; (2) where no pension costs are paid under a particular contract subject to FAR 31.205-6(j), but not subject full CAS coverage, the CAS 413.50(c)(12) segment closing provisions are not applicable to the contract through FAR 31.205-6(j); (3) a contractor constructively receives pension assets through a pension plan merger and must in accordance with FAR 31.205-6(j)(4), Termination of Defined Benefit Pension Plans, refund the government the equitable portion of any overfunding; and (4) the Board could admit expert reports and testimony that included interpretative material on CAS, affording appropriate weight to such interpretations."

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Angela B. Styles
Partner – Washington, D.C.
Phone: +1 202.624.2500

Terry L. Albertson
Senior Counsel – Washington, D.C.
Phone: +1 202.624.2635