Scottish independence is likely to create “considerable costs” within the pensions sector, particularly for employers, pension providers and their advisers, Xafinity has warned.

The pensions and employee benefits specialist stated that significant additional costs will arise if a new institutional framework is developed to supervise and deliver pensions in Scotland. In addition, Xafinity stated that “should sterling be retained as the national currency, a separate fiscal policy will require different tax and national insurance regimes, increasing costs for payroll functions”.

The need to replicate or complement The Pensions Regulator and the PPF will also be an issue. Further costs will be created by the IORP Directive “requiring all schemes located in Scotland accepting contributions from an employer located in the rest of the UK to apply for authorisation as a cross-border scheme with potential extra funding obligations”.

Xafinity principal consultant Donald Campbell said: “A yes to Scottish independence would make huge waves across the pension industry, both in Scotland and the remainder of the UK. Corporate advisers would be the obvious winners in the short term but additional costs would arise for many [employers, who would almost certainly be pressing for the new government to provide support in one form or another.”

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