Scotland's Pension Future have our questions been answered

Scotland's Pensions Future: Have our questions been answered? Is the second of two ICAS report on the implications for pensions in an independent Scotland.

1 February 2014

This second report examines the Scottish Government's proposed approach to pensions in an independent Scotland following the publication of two papers:

On publication of this report David Wood, Executive Director, Technical Policy and Practice Support, said "These Scottish Government papers have provided useful additional detail in relation to pension regulation and provision in an independent Scotland but some of our key questions remain unanswered. While we recognise that it will not be possible to answer every question prior to the Referendum, nevertheless important questions remain on how legacy issues will be resolved and new arrangements will be implemented."

There remains no clear plan as to how the Scottish and UK Governments will engage with the EU on how to minimise the impact of the cross-border funding rules on defined benefit schemes carrying deficits, which become cross-border schemes, in the event of independence.

The three year transitional period being discussed by the Scottish Government for addressing pension deficits held by new cross-border schemes is likely to be wholly insufficient as many UK employers currently fund scheme deficits over a much longer period.

We have further questions about the feasibility of an independent Scotland sharing pension protection arrangements with the UK while establishing a separate pension regulator.

We anticipate additional complexity than is currently acknowledged in relation to whether an individual's entitlement to a state pension at the date of independence would sit with an independent Scotland or with the UK. Similar issues arise in respect of entitlement to a pension from an unfunded public sector pension scheme.

David Wood added, "Security in retirement is a significant issue for the Scottish public. Everyone has concerns over whether or not they have the appropriate arrangements to provide for their retirement. ICAS has taken a neutral stance in the independence debate but we will continue to call for answers to important questions to ensure that the Scottish people are better informed."


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