THE weighty matters of sovereignty, currency and the UK national debt seem relatively straightforward next to the pensions questions facing an independent Scotland.
Indeed, both sides of the indy debate prefer to steer clear of the pensions issue as much as they can, such are the complexities.
The nation’s number-crunchers like a challenge though, judging by a new paper from the Institute of Chartered Accountants Scotland (ICAS). In it the institute takes a detailed look at how pensions will be provided in an independent Scotland.
ICAS argues that too few of the issues it raised in an initial report nearly a year ago were tackled by the Scottish government in its white paper on independence.
It pointed to fundamental questions over the transfer of state pensions that it claims have not been addressed. It added that the White Paper failed to shed light on how the Scottish government would define “living in Scotland at the date of independence” or “country of residence at the date of independence” when it comes to determining who is entitled to a Scottish state pension.
Similar questions surround the payment of pensions to members of unfunded public sector schemes (including the armed forces and NHS workers).
But perhaps the biggest grey area is that concerning workplace pensions, where there are particular complexities around regulation, protection, governance and the treatment of cross-Border schemes.
For instance, we still know very little about the likely costs to an independent Scotland of forming a regulatory structure for pensions, or the costs to schemes and employers of transferring to a new regulatory regime.
In all, ICAS has some three dozen questions for the Scottish government over its plans for the pensions system.
Pensions is an area in which uncertainty can be very damaging. Any absence of security and certainty diminishes the incentive to save and undermines confidence in the system.
So the latest contribution from ICAS is welcome, but we need more robust discussion over the future of our savings and state pensions in an independent Scotland.
And that’s a challenge not only for the Scottish and UK governments, but for the financial services industry. The silence of Scotland’s financial heavyweights on the topic of independence is deafening. In some ways it’s very understandable, given the flak they’ll inevitably get (from all sides). The firms are letting Scottish Financial Enterprise do the talking for them – which it does very well – and they have plenty to say behind closed doors.
But they have a responsibility to their customers on both sides of the Border to discuss more openly the likely implications of independence on our savings, pensions and investments, not to mention regulation, consumer protection and compensation.
There are significant risks – it would be very naive to suggest otherwise – but there’s plenty to gain too, for them, for us and for Scotland.