Financial reports of pension schemes: Statement of Recommended Practice

We also have separate resources on FRS 102: Employee benefits under new UK GAAP, FRS 17: Retirement benefits, IAS 19: Employee benefits and IAS 26: Accounting and reporting by retirement benefit plans.

The first statement (known as SORP 1) was published by the Accounting Standards Committee in 1986 and was based on the 1978 report 'Financial Reports for Pension Funds' from the Pensions Research Accountants Group. After this first statement the SORP making powers transferred to the Pensions Research Accountants Group. PRAG's role in pension scheme accounts is set out in its history.

Issuing body

Statements of Recommended Practice (SORPs) relating to pensions are issued by the Pensions Research Accountants Group (PRAG).

Sources for the SORP and associated guidance

The 2018 Pensions SORP was published in July 2018. This revised SORP updates the 2014 SORP in line with the current version of FRS 102 and the latest pension legislation. The 2018 SORP is effective for years commencing on or after 1 January 2019.

Information on the SORP is available from the PRAG but there is no free, online full text version of the SORP available. 

Copies of the latest version (and earlier versions) are also available via the Library service, along with extracts of the following updates and guidance:

• Accounting for Derivatives in Pension Schemes Guidance and Practical Assistance
  Updated in September 2022. This guidance note aims to help pension scheme accountants in understanding derivatives, maintaining accounting records for derivative contracts, and reporting derivatives in financial statements under FRS 102 and the 2018 SORP. It provides illustrative examples and example double entry postings.
• Pension Scheme Financial Statements and Going Concern
  Updated in December 2020. This edition incorporates changes made by revised ISA (UK) 570 and addresses the additional challenges trustees and auditors of pension schemes are likely to experience as a consequence of COVID-19 in meeting their responsibilities towards the scheme’s annual report, including the audited financial statements.
• Accounting for Guaranteed Minimum Pension equalisation by pension schemes following the Lloyds judgement (2019)
  Published in March 2019. This guide explains how pension scheme accounts should account for equalisation liabilities for guaranteed minimum pensions (GMPs) following the Lloyds judgment on pension equality.
• Guidance to the users of the pension Statement of Recommended Practice Financial Reports of Pension Schemes in relation to amendments to FRS 102
  Published in January 2016. An update to the December 2014 version of the SORP, this guidance covers disclosures required where the financial statements depart from FRS 102 and definition and disclosures for related parties.
• Update on pension scheme financial statement disclosures and the requirement to obtain an auditor's statement on contributions
  Published in April 2016. This update highlights key aspects of the amendment to the Audited Accounts Regulations (SI 2016/229) and amendments to FRS 102 in March 2016.

In March 2021 PRAG released an addendum to the Pensions SORP to help practitioners understand the additional investment disclosure requirements that have been introduced since the publication of the SORP in 2018. The PRAG press release notes that the new requirements do not affect financial reporting disclosures but do have an impact on the information included in the annual report. The addendum has been made available to PRAG members via the member zone of the PRAG website.

Archived documents

Example trustees' annual report and financial statements: KPMG guide 2020
Detailed guide from KPMG containing an example trustees' annual report and financial statements, and pension scheme annual report disclosure checklist. Updated in January 2021.

Illustrative annual report and financial statements
Model accounts produced by PwC in May 2020 for an occupational pension scheme applying FRS 102 and the 2018 Pensions SORP.

New 2018 Pensions SORP
Article from Evelyn Partners, published in September 2018, on the new Pensions SORP providing an overview of the changes. Previously published by Smith & Williamson prior to the launch of Evelyn Partners.

Pension scheme financial reporting - A way forward?
Sample financial statements and notes highlighting emerging best practice for pension scheme reporting under FRS 102 and the 2015 SORP. Published by KPMG in April 2017.

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