ASLEF warns of potential pensions’ disaster in an independent Scotland

30 May 2014

Pension schemes that cross borders of two or more European Union states are covered by extremely strict European legislation. Essentially, they must be fully funded at all time. Whilst this may sound sensible at face value, it must be remembered that pensions are long term investments and correcting deficits immediately can make schemes unaffordable.

General Secretary Mick Whelan explained, “Markets are cyclical and it is simply a matter of fact that pension schemes will occasionally go into deficit. Whilst UK law asks that shortfalls are dealt with as soon as possible, it allows deficit recovery plans to be affordable and therefore to be spread over a number of years. This allows schemes to remain open.”

Should schemes become cross border whilst they are in deficit, contribution rates for employers and employees could jump enormously putting benefits and the schemes themselves at risk. Scottish Regional Organiser Kevin Lindsay added, “There are so many things to consider ahead of the referendum in September, however this is an enormous factor for ASLEF members. Many of our members in both passenger and freight operators could be affected by this European legislation and I would call upon all of our members to do what they can to protect the pensions that they have paid into for so many years.”

Further information can be found here:

Cross Border Pensions and Scottish IndependenceCross Border Pensions and Scottish Independence

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