SSAP 24 Accounting for Pension Costs

The provision of a pension is part of the remuneration package of many employees. Pension costs form a significant proportion of total payroll costs and they give rise to special problems of estimation and of allocation between accounting periods. Accordingly, it is important that standard accounting practice exists concerning the recognition of such costs in the employers' financial statements.

SSAP 24 deals with the accounting for, and the disclosure of, pension costs and commitments in the financial statements of enterprises that have pension arrangements for the provision of retirement benefits for their employees. It requires employers to recognise the expected cost of providing pensions on a systematic and rational basis over the period during which they derive benefit from the employees' services. This is done by recognising a regular cost for the pension every year. Variations from the regular cost are allocated over the expected remaining service lives of the current employees.
SSAP 24 is effective for accounting periods starting on or after 1 July 1988 (subject to certain transitional arrangements).

SSAP 24 is being superseded by FRS 17, which is being implemented in stages between 22 June 2001 and 22 June 2003.

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