Many companies agree to pay employees a pension when they retire.

Employees earn the right to their pension benefits when they work.

Therefore, if an employee earns a $2,000 pension benefit in 2011 because he or she worked in 2011, the $2,000 is an expense in [2011 / when he or she retires]. It is a liability in [2011 / when he or she retires]. The liability is called Accrued Pensions .