Walter P. Schuetze is not concerned companies might be taking advantage of rising interest rates to aggressively jack up the interest rates they use to value future pension obligations.
"The SEC has 14,000 registrants. We can't police everyone. That's what their (corporate) auditors are there for," the outgoing chief accountant of the Securities and Exchange Commission said in an interview.
In September 1993, Mr. Schuetze had warned companies to lower the interest rates used to calculate pension obligations in tandem with falling interest rates. At the time, Mr. Schuetze urged companies to use a discount rate tied to the prevailing interest rate on high-grade corporate bonds.
Mr. Schuetze, speaking at a conference in Washington, also dismissed a suggestion that companies be allowed to base the discount rate on long-term interest rates.
"In FAS 87, the Financial Accounting Standards Board concluded that the current interest rate be used, rather than letting management use its own judgment on the trend of long-term rates," Mr. Schuetze said at the conference, sponsored by the American Institute of Certified Public Accountants. "I would not favor a move away from the current discount rate to long-term interest rates," he said.