The Scotsman devotes this morning’s first two pages to concerns about private pensions after independence, under the title Scottish independence: EU deals pensions blow. It’s prompted by an announcement from the EU that the rules on cross-border pensions will stay as they are. Under EU rules, cross-border pension schemes have to be fully funded; many UK schemes (about 5000 out of 6300) are currently in deficit.
A scheme doesn’t become a cross-border scheme because it’s paid to someone abroad – many people live abroad now (for example, pensioners living in Ireland and Spain) and receive British pensions. It’s a cross-border scheme if it is based and operated across boundaries, levying contributions from people in different countries.
There are some issues. Some pensions firms will have to change the way they operate. Schemes in deficit will have either to stop taking contributions from people situated abroad, or set up new, independent schemes for each country. Some people will have to join new pensions schemes, as many people do now when they move jobs; and some of them will find, reflecting the current economic climate, that the terms are less favourable than their current scheme – typically the scheme will offer lower returns, it won’t be salary-related, and and the date of retirement will be later. It’s a consideration, but it’s hardly decisive for the independence debate.