The Treasury says defined benefit pension schemes will face “substantial additional burdens” if Scottish citizens vote in favour of independence next year.
A report published by the Treasury this week warns DB schemes which are currently provided cross-border between England and Scotland would face significant difficulties if Scotland becomes independent because EU regulations would require them to be fully funded.
It says: “Currently, employers are able to run defined benefit and hybrid pension schemes UK wide. However, if Scotland were to leave the UK, schemes that are provided from Scotland to the rest of the UK and vice versa would become cross-border.
“An independent Scotland as a separate EU member state would create substantial additional burdens for any schemes that would become cross-border.”
In addition, the Treasury says an independent Scotland would be required to create its own Pension Protection Fund to guarantee the benefits of DB members if a scheme sponsor goes bust.
Syndaxi Chartered Financial Planners managing director Robert Reid says: “Clearly independence will create issues for DB schemes but we need a more balanced debate because the Treasury seems to be focusing only on the negatives.”