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PRB Costs Allowable Whether Measured Under FAS 106 or IRS Criteria

Client Alert | 1 min read | 09.23.09

To address the "catch-22" confronted by contractors using the accrual method of calculating post-retirement benefit (PRB) costs for financial reporting purposes who have had to choose either to fund the entire amount of PRB costs measured in accordance with Financial Accounting Standard (FAS) 106 in order to be reimbursed for the costs on Government contracts, or to fund only the amount of PRB costs deductible under the Internal Revenue Code (IRC) and thereby forgo reimbursement of the full FAS 106 amount, the FAR has been amended, under a final rule effective January 11, 2010, to allow contractors the option to measure accrued post-retirement benefit (PRB) costs using either the criteria in FAS 106 or the criteria in IRC 419. The final rule also (1) addresses the transition period when a change is made from one accrual accounting method to another by requiring the contractor to treat the change in unfunded accumulated PRB obligation as a gain or loss and demonstrate that there will be no duplicate recovery of costs as a result of the change; (2) expressly states that any prior period unfunded accrual is unallowable under either method of accrual accounting; and (3) clarifies that use of a health care assumption for measurement of costs is required unless prohibited by IRC welfare benefit fund rules.

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Client Alert | 4 min read | 04.24.24

Muldrow Case Recalibrates Title VII “Significant Harm” Standard

On April 17, 2023, the Supreme Court handed down a unanimous decision in Muldrow v. City of St. Louis, Missouri, No. 22-193, holding that transferees alleging discrimination under Title VII of the Civil Rights Act of 1964 need only show that a transfer caused harm with respect to an identifiable term or condition of employment.  The Court’s decision upends decades of lower court precedent applying a “significant harm” standard to Title VII discrimination cases.  As a result, plaintiffs claiming discrimination under Title VII will likely more easily advance beyond motions to dismiss or motions for summary judgment. In the wake of the Court’s decisions in Students for Fair Admissions, Inc. v. President and Fellows of Harvard College (6-2), No. 20-1199, and Students for Fair Admissions, Inc. v. Univ. of North Carolina (6-3), No. 21-707 (June 29, 2023), Muldrow will also likely continue to reshape how employers conceive of, implement, and communicate workplace Diversity, Equity and Inclusion (“DEI”) efforts.  The decision may be used by future plaintiffs in “reverse” discrimination actions to challenge DEI or affinity programs that provide non-economic benefits to some – but not all – employees.  For example, DEI programs focused on mentoring or access to leadership open only to members of a certain protected class could be challenged under Muldrow by an employee positing that exclusion from such programs clears this new, lower standard of harm. ...

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