WASHINGTON — Governmental Accounting Standards Board chairman Robert Attmore announced he will retire next June, after serving two five-year terms, but not before the board completes some key projects.
In an interview with The Bond Buyer, Attmore, 66, said it’s going to be busy over the next nine months before he officially steps down as chairman. Not only will he be involved in the transition process with his successor, but he will oversee the issuance of two final accounting standards and a set of implementation guides for pension accounting standards before he leaves.
“I think by providing nine months lead-time we have sufficient time for the trustees to go through their process and select my successor,” he said. “That allows time for us to go through a smooth transition, which is why I wanted to announce this as early as I did.”
In early 2013, GASB expects to release accounting and financial-reporting standards dealing with government combinations, such as when a government sells or discontinues a line of operations in which it is currently involved.
Another set of standards deals with state and local government financial guarantees, which have become more prominent since some of the challenges to liquidity in the municipal markets, according to Attmore.
“We thought it was important to provide some clarity and guidance on how to deal with the potential exposures from financial guarantees, whether a government is granting guarantees or receiving guarantees,” he said, citing Harrisburg as an example of a city undergoing fiscal stress as a result their financial guarantees.
In addition, GASB is preparing implementation guides for new accounting and reporting standards for state and local pension plans. The first of these, which will deal with pension plans, will be available in June 2013, just before the standards go into effect, Attmore said. The second one will cover employer or government reporting and will be available in late 2013 or early 2014.
Attmore’s retirement comes at a time when state and local governments are grappling with new accounting standards that have stoked intense debate about their pension plans. The accounting standards, approved in June and set to go into effect in 2013 and 2014, would increase the total unfunded liabilities reported by many governments, especially for those that already have funding problems.
Currently, governments disclose pension information in the footnotes to their financial statements and only report the contributions they are required to make in a given year, as well as what they actually paid. The new accounting rules, however, would require a government to disclose a “net pension liability” figure for the first time on its balance sheets, in addition to funding projections.
Underfunded pension plans would not be able to use the projected rate of return on their investments, which averages between 7% and 8%, to pay off their plan obligations. Instead, these plans would have to shift to a lower, so-called risk-free rate of return pegged to a high-quality, tax-exempt 30-year muni bond index rate, typically 3% to 4%.
Attmore said the pension accounting and reporting standards were his most significant accomplishment during his tenure as chairman. But the reaction from state and local governments to the pension changes has been mixed, he said.
“Over time, people have become more understanding and more receptive of what we put forth,” he said. “But there are still some disagreements in some camps.”
Attmore added that GASB and state and local governments have a good relationship. “We don’t always agree on everything, but that’s understandable,” he said. “My aspiration was to make sure that everybody, all of our constituents, could be comfortable that they would have a voice, that they would be heard, and we would consider whatever views that were put to us.”
Attmore was appointed to serve as the chairman of GASB in July 2004 and began serving his second five-year term in July 2009.
Prior to joining the the board, he worked as New York deputy state comptroller and state auditor from 1986 until 2003. Attmore is a graduate of Villanova University and is a certified government financial manager. Upon retirement, Attmore said he plans to spend more time with his family in the Albany, N.Y., area.
His successor has not been named. The board of trustees said it will launch a search to replace Attmore soon. It is unlikely that his successor will be appointed before the end of the year, GASB officials said.