PENSIONS experts say voters in Scotland are being left in the dark over how a post-independence system would be run.
In a report unveiled by Deputy First Minister Nicola Sturgeon, the Scottish Government on Monday set out “guarantees” on retirement income. It said an independent Scotland would review UK government plans to raise the retirement age, maintain the state pension and ensure private pensions were unaffected.
But actuaries, accountants and pensions advisers said there were big questions over how the plan would be paid for and organised. There are particular concerns over the impact of European Union rules that would force UK-wide funds to plug multi-billion-pound deficits immediately, if Scotland were to break away – a move that could create havoc.
The Scottish Government paper declares that a deal could be brokered in Europe to avert such a financial meltdown in many UK schemes. But the Institute of Chartered Accountants of Scotland (Icas) warned that the approval of all 28 EU member states would be needed.
The 109-page SNP report says all pensions in an independent Scotland would be paid “on time and in full” and that the value of the state pension – expected to be £118 in 2016 – would be protected with a “triple lock” to ensure it keeps pace with earnings and rising costs.
The SNP would introduce a single-tier pension for new pensioners, worth £160 a week.
As revealed at the weekend, an expert commission would be formed to examine whether the planned increase in the retirement age to 67 by 2025 should be cancelled. That could cost Scotland £6 billion, according to Treasury figures. Ms Sturgeon described that figure as “exaggerated” but said voters would have to wait until the commission reported to get a costing.
But experts said more information was required now, particularly over the cross-border question.
Malcolm Paul, of JLT Employment Benefits, which advises companies and pension scheme trustees across the UK, said: “It is a concern that at this point ahead of the referendum, we still don’t have answers to some big questions. The report identifies the issues that need to be faced but it provides little clarity.”
On the review of the retirement age, he warned: “The Scottish population is ageing more quickly than the rest of the UK. The demographic timebomb is more acute.”
Icas assistant director Christine Scott said: “Employers and pension scheme trustees need information and time to make contingency plans for how any transitional arrangements which may be put in place will affect their schemes.”
Neil Duncan Jordan, of the National Pensioners Convention, said: “The Scottish Government are being rather optimistic on the issue of pensions, particularly cross-border schemes where employees are based in both Scotland and other parts of the UK. The suggestion this can all be sorted out through negotiations doesn’t give workers that much confidence their company pension will remain intact.”