Pensions

[Well Well]

It is the additional one off cost and the required payment timescale that is the risk - to the employer, to the scheme or to both.

There is not a chance in hell private financial advisors never saw this coming and should have prepared for it, The referendum has only been discussed for the last 4 years..!! If the SNP care propose ways to deal with it in their paper then whats the problem as the UK govt had previously done as quoted " On the introduction of the directive the UK government's implementing legislation provided for a 3 year grace period for existing schemes"

[Tio Pepe]

There is not a chance in hell private financial advisors never saw this coming and should have prepared for it, The referendum has only been discussed for the last 4 years..!! If the SNP care propose ways to deal with it in their paper then whats the problem as the UK govt had previously done as quoted " On the introduction of the directive the UK government's implementing legislation provided for a 3 year grace period for existing schemes"

What have private financial advisors got to do with this issue? They do not sell corporate defined benefit schemes.

The UK government can say what they like too. EU rules state cross border schemes have to be fully funded. This is a huge risk to those in such schemes and their sponsoring employer.

[Well Well]

What have private financial advisors got to do with this issue? They do not sell corporate defined benefit schemes.

The UK government can say what they like too. EU rules state cross border schemes have to be fully funded. This is a huge risk to those in such schemes and their sponsoring employer.

The UK implemented it in legislation, big difference, therefore the risk is minimised. Scotland will do the same. The EU directive allows this or else the UK would not have been allowed time to implement the directive, sorry if it doesn't fit your scare story.

[MarkoRaj]

I suspect it's not a "yawn" for those impacted.

Assertions in a SNP document don't change the rules. Those are SNP wishes. The EU is not bound by SNP wishes. They are, however, bound by their rules. So unless someone can give an assurance that those rules will be changed and what they will be changed to then people in what would become cross border occupational schemes will experience a big risk in the event of independence.

Why wouldn't they change the rules though? They allowed a grace period between the uk and Ireland, what's the difference?

[Granny Danger]

Anyone who chooses to believe the lies about pensions or any of the other scare stories are unlikely to be swayed.

The 'too wee too poor' mentality is an affliction that the Bitters have been only too willing to exploit.

I'm perfectly relaxed about the security of my state pension.

[git-intae-thum]

Laughable nonsense from the unionists.

To suggest your pension is safer in the UK is a joke.

I can think of 1.5 trillion reasons for this.

Oh and by the way, to all those over a certain age. YOUR PENSION IS NOT SAFE IN THE UK!!!

Like millions of other under 45's, a large whack of my pension has already been stolen. That has made not one iota of difference to the UK deficit. Whose pension are they going to go after next!

Yes, pension affordability may not improve with independence, but it is certain to worsen in the current UK.

[Tio Pepe]

The UK implemented it in legislation, big difference, therefore the risk is minimised. Scotland will do the same. The EU directive allows this or else the UK would not have been allowed time to implement the directive, sorry if it doesn't fit your scare story.

When the directive was incorporated into UK law an allowance was made. This was 2004 and it was designed to smooth the impact of the initial implementation of the law and the EU allowed it. Additional grace periods are not within the gift of the SNP or UK government.

Even this grace period was challenging for business and schemes as deficits are normally recovered via a ten year plan. Deficits are more common now for many reasons, e.g. greater life expectancy, lower gilt yields. Hence the appliance of EU law poses a large risk to such schemes and the sponsoring employers. Pointing this out is not a scare story, it is a statement of fact. People impacted by such facts need to consider them.

I'm not surprised you cannot grasp this. Any answer yet on what private financial advisors have to do with this issue and how should they have planned for it?

[Tio Pepe]

Why wouldn't they change the rules though? They allowed a grace period between the uk and Ireland, what's the difference?

You'll need to ask the EU. It's their rule. Grace periods are sometimes allowed at the inception of new directives, however. After that unlikely and it is up to the EU, not member states or prospective member states so they should not be underplaying the issue and promising what they cannot deliver.

[Well Well]

When the directive was incorporated into UK law an allowance was made. This was 2004 and it was designed to smooth the impact of the initial implementation of the law and the EU allowed it. Additional grace periods are not within the gift of the SNP or UK government.

Even this grace period was challenging for business and schemes as deficits are normally recovered via a ten year plan. Deficits are more common now for many reasons, e.g. greater life expectancy, lower gilt yields. Hence the appliance of EU law poses a large risk to such schemes and the sponsoring employers. Pointing this out is not a scare story, it is a statement of fact. People impacted by such facts need to consider them.

I'm not surprised you cannot grasp this. Any answer yet on what private financial advisors have to do with this issue and how should they have planned for it?

So you are saying a EU directive that was brought in in 2004 has still not been implemented by Private pension funds and managers despite having 10 years to plan which should be completed by now. So if we have been discussing the referendum for four years already then how is that a fault with the Scottish Government and affect a Yes vote. The risk has been known for 10 years for Europe and 4 years for a referendum in Scotland. Plenty of time because the directive should now be policy for pension funds and shouldn't now be an issue. The fault I see is that they can't realise the capital rather than anything wrong with capital. Again the warnings have been there and they still didn't do anything to raise the capital to fully fund in 10 years for Europe and 4 years for Scotland.

[Tio Pepe]

So you are saying a EU directive that was brought in in 2004 has still not been implemented by Private pension funds and managers despite having 10 years to plan which should be completed by now. So if we have been discussing the referendum for four years already then how is that a fault with the Scottish Government and affect a Yes vote. The risk has been known for 10 years for Europe and 4 years for a referendum in Scotland. Plenty of time because the directive should now be policy for pension funds and shouldn't now be an issue. The fault I see is that they can't realise the capital rather than anything wrong with capital. Again the warnings have been there and they still didn't do anything to raise the capital to fully fund in 10 years for Europe and 4 years for Scotland.

What on earth are you talking about?

The law is in place. Cross border pension schemes have to be fully funded. Put up another border and more schemes become cross border and require to be fully funded.

Who said the law was the fault of the Scottish government? The rules are the rules. The Scottish government is guilty of downplaying the impact because the truth is potentially very inconvenient, but they are not guilty of failing to implement EU directives into national law because they haven't had to. We are talking about the impact of EU law on a particular type of pension post independence.

You still haven't explained why private financial advisors have any input here.

As I'm a helpful chap if you learn the difference between defined benefit and defined contribution schemes and the funding thereof you might get on better.

[AUFC90]

The real danger to pensions is the UK govs refusal to admit that net migration needs to increase to pay for them. Salmond said in a speech in Kilmarnock that this problem won't go away and will hit us sometime in the 2030s. At least the SG recognise the problem and are going to try and deal with it.

[Tio Pepe]

The real danger to pensions is the UK govs refusal to admit that net migration needs to increase to pay for them. Salmond said in a speech in Kilmarnock that this problem won't go away and will hit us sometime in the 2030s. At least the SG recognise the problem and are going to try and deal with it.

I don't think there's any danger to the state pension regardless of the outcome. The Scottish government's proposed approach has merit, the downside being that it becomes a self-perpetuating issue. More immigrants to pay for pensions means more people earning pension which needs to be paid by more immigrants later on. I'm not saying immigration is a bad thing, I'm very much pro-immigration but you can see that under the SNP's plans there will still be issues. That said I don't think they are insurmountable.

The risk to public sector pensions is marginally bigger due to accruing liabilities through longevity but no government will welch on those so it doesn't worry me. The real risk to such schemes is that they may be closed to future accrual of benefits and therafter contributions will be into a money purchase scheme. All governments will try to kick the issue into the long grass hoping that it isn't them that has to implement it, a bit like they do with raising the age people receive the state pension. That risk is much the same regardless of the referendum outcome in my opinion so not worth considering.

The only real risk is to Company schemes where they are cross border schemes.

[strichener]

How many of these pension plans that are in deficit are run by companies that had previously taken a contributions holiday in the past?

Shell takes a payment holiday in 2007

http://www.pensionsadvisoryservice.org.uk/news/2007/october/shell-takes-a-pension-contribution-holiday

Shell in deficit at the end of 2012

http://www.jltpcs.com/uploads/pdfs/8975%20JLT%20FTSE%20100%20Disclosures%20Report%20December%202013_v2.pdf

I think that anyone that is under 40 and expects either their employer (former or current) or the government to fund their retirement should seek financial advice.

[AUFC90]

I don't think there's any danger to the state pension regardless of the outcome. The Scottish government's proposed approach has merit, the downside being that it becomes a self-perpetuating issue. More immigrants to pay for pensions means more people earning pension which needs to be paid by more immigrants later on. I'm not saying immigration is a bad thing, I'm very much pro-immigration but you can see that under the SNP's plans there will still be issues. That said I don't think they are insurmountable.

The risk to public sector pensions is marginally bigger due to accruing liabilities through longevity but no government will welch on those so it doesn't worry me. The real risk to such schemes is that they may be closed to future accrual of benefits and therafter contributions will be into a money purchase scheme. All governments will try to kick the issue into the long grass hoping that it isn't them that has to implement it, a bit like they do with raising the age people receive the state pension. That risk is much the same regardless of the referendum outcome in my opinion so not worth considering.

The only real risk is to Company schemes where they are cross border schemes.

Not immigration but net migration. So reduce the people leaving and get more skilled workers in. Salmond said that they plan to increase the net migration from 22000 to 24000. Hardly opening the floodgates.

Like you say, the whole pensions thing is a non issue much like most of BTs main arguments. They just don't get it.

[Granny Danger]

I think that anyone that is under 40 and expects either their employer (former or current) or the government to fund their retirement should seek financial advice.

You may well be right. However in every discussion about pensions people ignore the millions of people who are in such low paid jobs that the idea of saving for a pension is pie in the sky.

[strichener]

You may well be right. However in every discussion about pensions people ignore the millions of people who are in such low paid jobs that the idea of saving for a pension is pie in the sky.

Fair point. Although the idea that everyone on low pay cannot save for the future is nixed when they go on a foreign holiday. Don't get me wrong I am not claiming that every low paid worker does this but many do.

[HaikuHibee]

In the joining negotiations, along with ensuring iScotland gets all current UK rebates and opt-outs, the SNP will just get them telt on anything else that needs sorted.

Get with the programme man.

I really doubt that. If yes, UK'll change their tune. The will want access.

[MarkoRaj]

You may well be right. However in every discussion about pensions people ignore the millions of people who are in such low paid jobs that the idea of saving for a pension is pie in the sky.

Not only that but this only affects 'defined benefit' schemes. Aren't many places that still offer that, let me tell you

[Tio Pepe]

How many of these pension plans that are in deficit are run by companies that had previously taken a contributions holiday in the past?

Shell takes a payment holiday in 2007

http://www.pensionsadvisoryservice.org.uk/news/2007/october/shell-takes-a-pension-contribution-holiday

Shell in deficit at the end of 2012

http://www.jltpcs.com/uploads/pdfs/8975%20JLT%20FTSE%20100%20Disclosures%20Report%20December%202013_v2.pdf

I think that anyone that is under 40 and expects either their employer (former or current) or the government to fund their retirement should seek financial advice.

It will have played a part, but many schemes did used to run a surplus and as the employer was ultimately guaranteeing the benefits then they probably felt there was no need to add to that surplus. The bigger impacts are the changes Gordon Brown introduced around the taxation of dividends, low yields due to historically low interest rates and the rapid increase in longevity statistics.

Not only that but this only affects 'defined benefit' schemes. Aren't many places that still offer that, let me tell you

The fact that they are seldom offered outside the public sector is not relevant. The schemes still exist regardless. They may be closed to new members and current members may not be able to accrue further benefits put the schemes are paying pensioners and have large numbers of deferred members.

[MarkoRaj]

It will have played a part, but many schemes did used to run a surplus and as the employer was ultimately guaranteeing the benefits then they probably felt there was no need to add to that surplus. The bigger impacts are the changes Gordon Brown introduced around the taxation of dividends, low yields due to historically low interest rates and the rapid increase in longevity statistics.

The fact that they are seldom offered outside the public sector is not relevant. The schemes still exist regardless. They may be closed to new members and current members may not be able to accrue further benefits put the schemes are paying pensioners and have large numbers of deferred members.

Not irrelevant if you're talking about funding them. Low numbers mean more likely to be able to cover them