Some pension schemes could close in an independent Scotland because of a funding gap, according to a report by one of the country’s biggest pension groups.
The National Association of Pension Funds, which represents 1,300 pension schemes in the UK with around 250,000 employees in Scotland, provided a damning critique of the scene in the wake of a Yes vote.
It pointed to “a lack of clarity about how the regulatory structure for pension schemes in an independent Scotland would work” and cast doubt over how any transition would be managed.
The report said: “Any complexity in tax regimes is likely to add significant costs for employers and schemes, which are in turn likely to be passed on to pensions scheme members.”
It added: “Under EU law, pensions schemes with members in Scotland and in the UK could become ‘cross-border’ schemes and would, therefore, need to be fully funded at all times. A more demanding funding regime is likely to lead to the closure of defined benefit (DB) schemes.”
The document concluded: “It is difficult to quantify the potential impact on future funding requirements in the absence of any clarity on this issue. However, we remain concerned about the potential impact of increased pension funding on economic growth and the potential increase in scheme closures.”
Labour’s shadow pensions minister, Gregg McClymont MP, said: “This is a devastating indictment of the SNP’s failure to provide credible and costed answers about the implications of separation on pensions in Scotland.”
He added: “The choice is clear on pensions believe Alex Salmond or the people who look after your pension.”
Finance Secretary John Swinney said: “People’s pension rights will be fully protected in an independent Scotland and payment of the benefits they have built up in their existing workplace pensions would not be affected by the move to independence. The same principle would apply to the state pension.
“In an independent Scotland, the state pension will continue to be paid in full, and on time, as now.”