SCOTTISH INDEPENDENCE AND RETIREMENT PENSION PROVISION When it comes to pensions, Scottish Independence could have a major impact on UK businesses in particular as outlined in the ICAS report Scotland’s Pensions Future. icas.org.uk @ICASaccounting Private sector pension schemes operating between an Independent Scotland and the remainder of the UK would be classed ‘cross-border’ under EU law. Any negotiations leading to independence would involve identifying what share of UK assets and liabilities – including public sector pension liabilities – would feature on the opening balance sheet of an Independent Scotland. Which government would be responsible for the State Pension entitlements of Scots built up before Independence? The European question Scotland’s opening balance sheet The State Pension: who pays? £ Potentially causing major cost and cash flow issues for businesses on both sides of the border. ICAS takes a neutral stance on the issue of Scottish Independence but recognises that it has a duty to act in the public interest by contributing information and insights to the debate. OPENING BALANCE ? Strict EU solvency rules would apply requiring: Cross-border pension schemes to be fully funded at all times Underfunding to be rectified immediately rather than through a staged recovery plan Annual instead of triennial actuarial valuations Scotland’s share of pension liabilities relating to UK-wide public sector pension arrangements would need to be identified. Scottish public sector pension liabilities arising from devolved activities at 31 March 2012 *Source: Scottish Public Pensions Agency £86bn Scottish unfunded public sector pension liabilities arising from devolved activities Scottish funded public sector pension liabilities arising from devolved activities £60bn (70%) £26bn (30%) UK liabilities at 31 March 2011 £2,421bn *Source: 2010-11 UK Whole of Government Accounts Other liabilities UK unfunded public sector pension liabilities UK public sector funded pension liabilities £1,461bn (60%) £893bn (37%) £67bn (3%) UK Pension Bill (2010-2011) £74bn £8bn =£82bn 40% 13% of UK social benefit payments of all UK expenditure pension credits state pensions
Infographic to Accompany ICAS Pensions Paper Scotland's Pensions Future
Apr 12, 2015
ICAS has published a new report, Scotland’s Pensions Future: What Pensions Arrangements Would Scotland Need?, a major contribution to the debate on Scotland’s future, its meaning and the implications for those in Scotland, the rest of the UK and beyond.
To download the full report, go to ICAS.org.uk/scotlandspensionsfuture.pdf
To download the full report, go to ICAS.org.uk/scotlandspensionsfuture.pdf
Welcome message from author
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
SCOTTISH INDEPENDENCE AND RETIREMENT PENSION PROVISIONWhen it comes to pensions, Scottish Independence could have a major impact on UK businesses in particular as outlined in the ICAS report Scotland’s Pensions Future.
icas.org.uk @ICASaccounting
Private sector pension schemes operating between an Independent Scotland and the remainder of the UK would be classed ‘cross-border’ under EU law.
Any negotiations leading to independence would involve identifying what share of UK assets and liabilities – including public sector pension liabilities – would feature on the opening balance sheet of an Independent Scotland.
Which government would be responsible for the State Pension entitlements of Scots built up before Independence?
The European question
Scotland’s opening balance sheet
The State Pension: who pays?
£ Potentially causing major cost and cash flow issues for businesses on both sides of the border.
ICAS takes a neutral stance on the issue of Scottish Independence but recognises that it has a duty to act in the public interest by contributing information and insights to the debate.
OPENING
BALANCE?
Strict EU solvency rules would apply requiring:
Cross-border pension schemes to be fully funded at all times
Underfunding to be rectified immediately rather than through a staged recovery plan
Annual instead of triennial actuarial valuations
Scotland’s share of pension liabilities relating to UK-wide public sector pension arrangements would need to be identified.
Scottish public sector pension liabilities arising from devolved activities at 31 March 2012
*Source: Scottish Public Pensions Agency
£86bn Scottish unfunded public sector pension liabilities arising from devolved activities
Scottish funded public sector pension liabilities arising from devolved activities
£60bn (70%)
£26bn (30%)
UK liabilities at 31 March 2011
£2,421bn
*Source: 2010-11 UK Whole of Government Accounts
Other liabilities
UK unfunded public sector pension liabilities
UK public sector funded pension liabilities
£1,461bn (60%)
£893bn (37%)
£67bn (3%)
UK Pension Bill (2010-2011)
£74bn£8bn
=£82bn 40%13%
of UK social benefit payments
of all UK expenditure
pension credits
state pensions
Related Documents
