Professional Pensions readers are not expecting a ‘Yes' vote, but warn that it would cause a major headache for schemes and leave Scottish pensioners worse off
While only 17% of respondents to this week’s Pensions Buzz poll expect Scotland to go its own way – with a further 39% saying the numbers were too close to call – most were expecting a significant headache in the event of a ‘Yes’ vote.
Almost half (46%) of the 133 respondents said this outcome would create a “huge” amount of work for schemes that had to adapt to a two-country regime.
A further third were unsure what the impact of a ‘Yes’ vote would be, but suspected it would create a significant workload for them.
One respondent said: “Multi-currency, multi-taxation rules, multi-tax relief rules, changes to scheme rules, terms and conditions and all literature, PPF [Pension Protection Fund], Scottish regulators, Scottish HMRC, default investments in native currencies....It doesn’t bear thinking about, unless you’re a legal or consultancy firm who will have a blank cheque book for several years.”
Another contributor predicted: “I would imagine there could be huge consequences to schemes set up under UK trust law if Scotland decides to abandon that – which as an independent country it will have to do – not only to standalone Scottish schemes, but also those where there are separate sections to cater for Scottish members.”
Several respondents were worried that the extra work could take the industry to breaking point, given the difficulties it already faced adapting to legislative changes.
“The waste of time, cost and effort is a disgrace given everything else that is going on in the industry,” said one commentator.
Another respondent listed “currency uncertainty for contributions and recovery payments”, “jurisdiction uncertainty over prospective legal challenges”, and the “cost and time involved in hiving off and separating our Scottish operations” as distractions.
But a more optimistic respondent said: “The effect on occupational pension schemes will be negligible, although there will undoubtedly be a greater effect in wider financial services fields.”
Another contributor added: “The change will affect hugely those schemes with a territorial link to Scotland, Scottish insurers and some asset-backed funding arrangements. I don’t see how the majority would be affected directly though.”
To see all the results of this week’s Pensions Buzz survey, visit:
Ten master trusts will pay at least 25% of the total general levy despite holding just 2% of assets, according to The People’s Pension (TPP).
The Department for Work and Pensions’ consultation on increasing the general levy has closed. Holly Roach looks at the industry’s response to its proposals
A pension schemes bill is set to be laid in parliament in the coming weeks after the government announced a wide-ranging suite of reforms in the Queen’s Speech today.
Partner Insight: Members' evolving needs and expectations are driving changes in scheme administration. As the pensions landscape inevitably continues to change, how will your scheme's approach need to develop to keep pace?
Partner Insight: Increasingly from a scheme perspective, keeping up with routine administration demands is only half of the challenge.