Pensions and independence

[lichtgilphead]

21 hours ago, coprolite said:

If the uk is splitting in two, then the two constituent parts should share a proportion of the obligations of the previous Uk.

So Scotland should take on 1/12 of the obligations to pay the pensions of all former UK citizens and rUK 11/12.

That's fine by me on one condition - as long as we apply this principle to every asset owned by & every obligation owed by the whole UK.

Let's total everything up, and we'll take 1/12 of the value of everything owned and everything owed, whilst rUK takes 11/12.

Strangely however, when anyone proposes this equitable split, Yoons refuse to even consider that iScotland should get 1/12 of things like the Embassy & Consulate network, the Armed Forces, the "National" museums, or Westminster Palace

Which bits of the UK Overseas dependencies (Falklands etc) do you think Scotland should get?

13 hours ago, Dawson Park Boy said:

I think those who emigrate e.g. Canada get their pensions at the rate when they left but don’t get increases. That certainly used to be the case.

Depends where you emigrate to. It won't increase in Canada (or NZ), but will increase in all other countries which the UK has reciprocal agreements with (including the EEA, Gibraltar & Switzerland). Obviously, the problem now for any UK national wishing to retire abroad is that there is no longer an automatic right to remain in many of these countries for > 90 days, but I think that you believe that this is a good thing?

11 hours ago, DMCs said:

OK let's disambiguate two things here. According to UK law it is illegal to change the terms of current pensions i.e. once a pensioner has reached State Pension Age that pension actually does become his property which he is legally entitled to. For those people, I believe it's quite a large number up to maybe 1m Scots, we can safely assume that their pensions would not be reduced or stopped BUT we don't really know who would pay it and that would be down to negotiations between Scotland and rUK. Ultimately it could be anywhere from 100% ScotGov paid to 100% UKGov paid.

In terms of current workers you're still making the mistake of using terms such as "pension rights" which is not the way to think about it. You don't have a "right" to a state pension until you get it i.e. by reaching SPA. Before then it can be changed, improved, removed, etc. by Parliament at will. The same would likely be the case for Scottish government pensions in the event of independence. This has been confirmed legally on quite a few occasions including in the 2002 "Frozen Pensions case" and also by the European Court of Human Rights in 2008. I've attached the ECHR judgement. 

In light of this it's clear that those future pensions would be the sole responsibility of an independent Scottish government. There is no reason why they could not count up the years working and in either UK or an indy Scotland for their final payout. Ultimately that would be up to the Scottish Parliament. They could have a much simpler system or a system more similar to Germany (where contributions matter much more) that they would potentially phase in.

Chamber judgment Carson and Others v. the United Kingdom 04.11.08.pdf 131.31 kB · 0 downloads

UK law There is no such thing as "UK Law". We have 3 seperate legal systems which are similar, but not identical

It is illegal to change the terms of current pensions For someone who has been banging on about the doctrine of UK Parliamentary Legislative Supremacy for his last few posts, you have a strange concept of how it operates. In simple terms, parliamentary supremacy means that , in general, the courts cannot overrule or question an Act of the Westminster Parliament. The UK state pension could be reduced to zero tomorrow if the UK parliament voted for it.

We don't really know who would pay it and that would be down to negotiations between Scotland and rUK Yes, that's what I said. I then went on to ask questions regarding how this would be implemented. You didn't even attempt to answer these simple questions.

In terms of current workers you're still making the mistake of using terms such as "pension rights" That's interesting, as the UK government website has a pension forecaster available to allow me to estimate how much pension I may receive when I reach state pension age. Can I suggest that you get in touch with them and ask them to emphasise the point that they may decide to change the rules for eligibility at any time, so the calculation based on my current NI payments is worthless?

In future, if I use the term "my pension rights", please read it as "my pension rights, assuming that the UK government does not decide to take them away because someone on P'n'B thinks the UK Government are petty and vindictive". That will save me having to type it out in full every time. Thanks.

Before then it can be changed, improved, removed, etc. by Parliament at will. The same would likely be the case for Scottish government pensions in the event of independence. It's only your opinion that these actions would be taken, of course. Can I remind you that during the 2014 Indyref, the 3 main UK parties all committed to retain the "triple lock" until at least the end of that parliament. Whilst we're indulging in speculation, can I also point out that iScotland would probably have a proper constitution, and unjust laws could be subject to review by the courts. 

In real life, however, do you not think that Scotland & rUK will have reciprocal arrangemnts? The questions I asked of you in my previous post remain unanswered...

I've attached the ECHR judgement. You have a touching faith that EHCR judgements will continue to be considered to be precedent if the current UK Government have their way. Why are you suddenly ignoring UK Parlimentary Supremacy again? 

In light of this it's clear that those future pensions would be the sole responsibility of an independent Scottish government. If I'm reading this correctly, you are now contradicting your previous post, where you stated that the party paying will be subject to negotiation. The only thing that is obvious is that someone that has currently never paid into the UK system will be entitled to no rUK pension if he never works in rUK - A person who starts work in Scotland on IndyDay will receive a pension from the Scottish Government on the day that he becomes eligible for a Scottish State pension. 

The question of entitlement to a UK state pension for someone who has worked in the current UK and then in iScotland is (IMO) clear: Assuming that the UK current state pension entitlements are not changed in a petty vindictive fashion, I expect to receive a UK state pension for the years I paid tax and NI to the UK Government, and a Scottish state pension for the years I work in an iScotland. As I've already stated, I don't care how the rUK Government pay their share - they can pay a lump sum to SGovt on an acturial basis, or can pay me directly every 4 weeks.

Edited April 8, 2021 by lichtgilphead

[Juanhourjoe]

This is pretty simple. And it's hard to believe this question could take up 4 pages already.

The successor state.(UK) is responsible for all assets and liabilities. (Pensions)

Pensions paid by the Scottish government, will be paid on contributions to the Scottish pot. Once it's established. Your UK pension is also paid into a pot. It's just been in arrears for quite a while though.

[coprolite]

10 hours ago, Juanhourjoe said:

This is pretty simple. And it's hard to believe this question could take up 4 pages already.

The successor state.(UK) is responsible for all assets and liabilities. (Pensions)

Pensions paid by the Scottish government, will be paid on contributions to the Scottish pot. Once it's established. Your UK pension is also paid into a pot. It's just been in arrears for quite a while though.

It's probably taken up four pages because people still need to be told that there is no pot. 

 

10 hours ago, lichtgilphead said:

That's fine by me on one condition - as long as we apply this principle to every asset owned by & every obligation owed by the whole UK.

Let's total everything up, and we'll take 1/12 of the value of everything owned and everything owed, whilst rUK takes 11/12.

Strangely however, when anyone proposes this equitable split, Yoons refuse to even consider that iScotland should get 1/12 of things like the Embassy & Consulate network, the Armed Forces, the "National" museums, or Westminster Palace

Which bits of the UK Overseas dependencies (Falklands etc) do you think Scotland should get?

 

Nice straw man. Of course things like the armed forces and diplomatic assets should be divided. Museum collections too. Difficult to see how Scotland could get a share of buildings  in London though. What some "yoon" has argued on twitter or the daily politics has little bearing on what would actually happen in practice. 

I've never given a second's thought to what would happen with the former colonies. Most of them aren't really "posessions" of the uk though are they.  Not sure of the relevance to pensions, but my provisional answer is we can have the ones with oil and rUK can keep the offshore financial centres. 

[SandyCromarty]

44 minutes ago, coprolite said:

It's probably taken up four pages because people still need to be told that there is no pot. 

 

Nice straw man. Of course things like the armed forces and diplomatic assets should be divided. Museum collections too. Difficult to see how Scotland could get a share of buildings  in London though. What some "yoon" has argued on twitter or the daily politics has little bearing on what would actually happen in practice. 

I've never given a second's thought to what would happen with the former colonies. Most of them aren't really "posessions" of the uk though are they.  Not sure of the relevance to pensions, but my provisional answer is we can have the ones with oil and rUK can keep the offshore financial centres. 

A major separation negotiation and one that will cost the most Billions is the relocation of the HMNB Clyde Nuclear Weapon facility at Faslane, a report has outlined that the relocation will be at a huge cost for england, Wales and NI if they were to bear the cost alone, but as the SG has indicated Scotland will take over the facility as a Scottish naval base there bye protecting jobs. So with that I would anticipate Scotland having to assume some of the relocation costs and the acquisition of the established base.

[DMCs]

 

12 hours ago, lichtgilphead said:

In light of this it's clear that those future pensions would be the sole responsibility of an independent Scottish government. If I'm reading this correctly, you are now contradicting your previous post, where you stated that the party paying will be subject to negotiation. The only thing that is obvious is that someone that has currently never paid into the UK system will be entitled to no rUK pension if he never works in rUK - A person who starts work in Scotland on IndyDay will receive a pension from the Scottish Government on the day that he becomes eligible for a Scottish State pension. 

The question of entitlement to a UK state pension for someone who has worked in the current UK and then in iScotland is (IMO) clear: Assuming that the UK current state pension entitlements are not changed in a petty vindictive fashion, I expect to receive a UK state pension for the years I paid tax and NI to the UK Government, and a Scottish state pension for the years I work in an iScotland. As I've already stated, I don't care how the rUK Government pay their share - they can pay a lump sum to SGovt on an acturial basis, or can pay me directly every 4 weeks.

This here illustrates the issue essentially. I haven't contradicted myself as pensions currently made out to pensioners and pensions that could come in the future are totally legally different! One is actually the property of the recipient and if the government failed to pay him what he was due then he could sue and win damages. The other is a promise in the future to give you a benefit which isn't at all legally binding and can be changed by parliament at any time. Which is what has happened in numerous occasions with state pension age increases.

It's not like a defined contribution (DC) pension that you get in the private sector where you pay 5% of your salary a month and your employer matches that and that all goes into a pot which is invested in financial instruments hopefully increasing in value over time to beat price inflation. Because there are many people who pay far more in NI than they would ever get in a state pension and vice versa.

It's essentially like JSA which is why if/when Scottish independence happened all new pensions would instantly become the responsibility of the new Scottish Government. Maybe there would be a transition period like there was with Brexit so all citizen data could be handed over and the new Scottish DWP all set up and ready but that's how it would work. Why? Because state pensions are paid out of current NI contributions.

Imagine someone was employed in UK for 40 years then had to claim JSA in a indy Scotland. Would that person be right in saying that "why isn't the UK gov paying for this as MY taxes were going to them all these years"? No, the responsibility would be entirely on the Scottish government at that point and his previous contributions are totally irrelevant.

[Dawson Park Boy]

51 minutes ago, DMCs said:

 

This here illustrates the issue essentially. I haven't contradicted myself as pensions currently made out to pensioners and pensions that could come in the future are totally legally different! One is actually the property of the recipient and if the government failed to pay him what he was due then he could sue and win damages. The other is a promise in the future to give you a benefit which isn't at all legally binding and can be changed by parliament at any time. Which is what has happened in numerous occasions with state pension age increases.

It's not like a defined contribution (DC) pension that you get in the private sector where you pay 5% of your salary a month and your employer matches that and that all goes into a pot which is invested in financial instruments hopefully increasing in value over time to beat price inflation. Because there are many people who pay far more in NI than they would ever get in a state pension and vice versa.

It's essentially like JSA which is why if/when Scottish independence happened all new pensions would instantly become the responsibility of the new Scottish Government. Maybe there would be a transition period like there was with Brexit so all citizen data could be handed over and the new Scottish DWP all set up and ready but that's how it would work. Why? Because state pensions are paid out of current NI contributions.

Imagine someone was employed in UK for 40 years then had to claim JSA in a indy Scotland. Would that person be right in saying that "why isn't the UK gov paying for this as MY taxes were going to them all these years"? No, the responsibility would be entirely on the Scottish government at that point and his previous contributions are totally irrelevant.

Thanks - very clear

[lichtgilphead]

11 hours ago, coprolite said:

It's probably taken up four pages because people still need to be told that there is no pot. 

 

Nice straw man. Of course things like the armed forces and diplomatic assets should be divided. Museum collections too. Difficult to see how Scotland could get a share of buildings  in London though. What some "yoon" has argued on twitter or the daily politics has little bearing on what would actually happen in practice. 

I've never given a second's thought to what would happen with the former colonies. Most of them aren't really "posessions" of the uk though are they.  Not sure of the relevance to pensions, but my provisional answer is we can have the ones with oil and rUK can keep the offshore financial centres. 

I would disagree that it's a straw man. I would be happy if all assets and liabilities were divided equally. However, the rUK have clearly stated that they would wish to be considered the "successor state". This means that they inherit all the assets (like embassies etc) and liabilities (like accrued pension rights to the date of seperation) currently owed by the current UK.

If they go down the "equitable split" route, a valuation could be placed on all govrernment assets (and liabilities) and the settlement worked out in asset value terms.

What annoys me is the continued assertions that the UK would keep all the assets but that the liabilities (national debt, pensions etc) would be split.

With regard to the crown dependencies, (and the  British Overseas Territories), I was being flippant, but would point out that they are not "former colonies" - the UK still provides them with various services. If rUK is the "successor state", they will be responsible for these services, but if an equitable split is preferred, these items would also probably be part of the balance sheet

[lichtgilphead]

9 hours ago, DMCs said:

 

This here illustrates the issue essentially. I haven't contradicted myself as pensions currently made out to pensioners and pensions that could come in the future are totally legally different! One is actually the property of the recipient and if the government failed to pay him what he was due then he could sue and win damages. The other is a promise in the future to give you a benefit which isn't at all legally binding and can be changed by parliament at any time. Which is what has happened in numerous occasions with state pension age increases.

It's not like a defined contribution (DC) pension that you get in the private sector where you pay 5% of your salary a month and your employer matches that and that all goes into a pot which is invested in financial instruments hopefully increasing in value over time to beat price inflation. Because there are many people who pay far more in NI than they would ever get in a state pension and vice versa.

It's essentially like JSA which is why if/when Scottish independence happened all new pensions would instantly become the responsibility of the new Scottish Government. Maybe there would be a transition period like there was with Brexit so all citizen data could be handed over and the new Scottish DWP all set up and ready but that's how it would work. Why? Because state pensions are paid out of current NI contributions.

Imagine someone was employed in UK for 40 years then had to claim JSA in a indy Scotland. Would that person be right in saying that "why isn't the UK gov paying for this as MY taxes were going to them all these years"? No, the responsibility would be entirely on the Scottish government at that point and his previous contributions are totally irrelevant.

Sorry, but I consider your view to be wrong.

The UK government can (by Act of Parliament) amend the amount of pension received by any current pensioner, and (assuming that the intent of parliament is clearly expressed), the courts will not intervene. Indeed, if your contention about current pensioners is correct, the UK government would be unable to increase current pension rates! 

JSA is a different matter. It is normally based upon your NI payments in recent years, not over your entire empoyment history. In addition, it is not payable to anyone over the state pension age, so I'm not sure why you appear to be stating that a pensioner would receive it?

Accordingly, if Indyday was tomorrow and I becane unemployed, my application for JSA would be based upon my NI contributions for the last couple of years to the UK treasury. To my mind, that makes the rUK responsible for payment.

If I became unemployed two years after Indyday, then the Scottish Treasury would be respnsible, as my claim would relate to NI that I had paid to them.

A few folk will become unemployed between these dates, but the amounts payable will be tiny compared with the number of pensioners.

Your claims appear to be becoming wilder & wilder. Let's agree to disagree & just leave this behind.

[DMCs]

10 hours ago, lichtgilphead said:

Accordingly, if Indyday was tomorrow and I becane unemployed, my application for JSA would be based upon my NI contributions for the last couple of years to the UK treasury. To my mind, that makes the rUK responsible for payment.

This is absurd. Obviously after independence all unemployment benefits would be the responsibility of the Scottish government. No government in the world pays unemployment benefits to those outside of it's jurisdiction. My point was that NI contributions are not directly linked to whether you get benefits like state pension or JSA.

Ultimately a policy for Scottish pensions after independence needs to be a realistic one and the idea that we could "double the state pension" (without significant tax rises) as some MSPs have misleading said is incorrect. The state pension already costs 5.5% of GDP and that will only grow if the triple lock is maintained and our demographic trends don't change.

[lichtgilphead]

2 hours ago, DMCs said:

This is absurd. Obviously after independence all unemployment benefits would be the responsibility of the Scottish government. No government in the world pays unemployment benefits to those outside of it's jurisdiction. My point was that NI contributions are not directly linked to whether you get benefits like state pension or JSA.

Ultimately a policy for Scottish pensions after independence needs to be a realistic one and the idea that we could "double the state pension" (without significant tax rises) as some MSPs have misleading said is incorrect. The state pension already costs 5.5% of GDP and that will only grow if the triple lock is maintained and our demographic trends don't change.

I'm beginning to get annoyed with having to continually correct your nonsense. At this very moment, the UK government are paying JSA to a number of claimants who have moved to the EU to look for work.

As far as I am aware, the EU is "outside the UK's jurisdiction,"

[strichener]

2 hours ago, DMCs said:

My point was that NI contributions are not directly linked to whether you get benefits like state pension or JSA.

That is absurd, both of these benefits can be paid or not based on NI contributions.

[DMCs]

23 minutes ago, strichener said:

That is absurd, both of these benefits can be paid or not based on NI contributions.

Very indirectly based is what I've been saying. Which is true.

[DMCs]

43 minutes ago, lichtgilphead said:

I'm beginning to get annoyed with having to continually correct your nonsense. At this very moment, the UK government are paying JSA to a number of claimants who have moved to the EU to look for work.

As far as I am aware, the EU is "outside the UK's jurisdiction,"

For up to 3 months only and Brexit will have an effect here with no FoM now.

[lichtgilphead]

Agreed, but the principle remains the same. You were talking nonsense when you said that no country pays benefits to claimants out with their jurisdiction.

Secondly, your FoM argument is another straw man. There are still areas of the EU where FoM is available. Eire, perhaps?

Finally, and returning to the theme of the thread, I don't believe you ever answered the point about how UK pension entitlement would be different for someone who had worked in the UK and retired to France, and a similar person who retired to iScotland, assuming (of course) that the rUK did not change the eligibility rules in a petty & discriminatory manner?

[strichener]

1 hour ago, DMCs said:

Very indirectly based is what I've been saying. Which is true.

Qualification is directly based on contributions.  The amount payable is indirect.

[DMCs]

Just now, strichener said:

Qualification is directly based on contributions.  The amount payable is indirect.

Not exactly. You could theoretically go your entire live without paying a penny of NI and still get a full state pension.

[DMCs]

38 minutes ago, lichtgilphead said:

Agreed, but the principle remains the same. You were talking nonsense when you said that no country pays benefits to claimants out with their jurisdiction.

Secondly, your FoM argument is another straw man. There are still areas of the EU where FoM is available. Eire, perhaps?

Finally, and returning to the theme of the thread, I don't believe you ever answered the point about how UK pension entitlement would be different for someone who had worked in the UK and retired to France, and a similar person who retired to iScotland, assuming (of course) that the rUK did not change the eligibility rules in a petty & discriminatory manner?

The statements from UK government and DWP pension sources have been very clear on this that new pensions would automatically become the responsibility of the Scottish state after independence. I suspect it's quite likely what we are arguing about will be tested within 10-20 years and I believe I will be proven correct. 

Could an independent Scottish state afford the current state pension? Maybe but it would require at least one of three things to happen for it affordable long term as Scotland has the oldest population of any of the UK nations and is aging quickest.

1 - strong above average economic growth and for pensions to not be increased above the triple lock.

2 - the aging effect to be slowed or reversed. More immigration would help a lot here but it's a bit of a plaster temporary fix that doesn't solve the problem correctly. What we need is higher birth rates and especially for emigration to be reduced (through incentives rather than any Berlin Wall type coercion I hope) as that could be a big issue for an independent Scotland. For birth rates a big problem is our housing market. 

3 - Increasing taxes to pay for increasing state pension costs. I believe this would be a terrible policy but it is one way of dealing with it.

[strichener]

19 minutes ago, DMCs said:

Not exactly. You could theoretically go your entire live without paying a penny of NI and still get a full state pension.

It is still based on NI contributions to calculate qualifying years regardless of if these are made by credits, PAYE deductions, self-employment or voluntary payments.

[lichtgilphead]

1 hour ago, DMCs said:

The statements from UK government and DWP pension sources have been very clear on this that new pensions would automatically become the responsibility of the Scottish state after independence.

Please provide some links to credible sources to back up your claim.

The only UK Government statement I recall dates from 2014, when they admitted that pension entitlements would be unaffected by a yes vote.

If the post-indy Scotgov are responsible for funding & paying the pensions of all qualifying Scottish-domiciled citizens after that date, how could the UK Government make that claim? If it became a ScotGov responsibility on Indy Day, surely they would have said "That's a matter for a future ScotGov", wouldn't they.

Finally, can you please attempt to answer the question I asked in my previous post (and previously). Here it is again:

How would UK pension entitlement be different for someone who had worked in the UK and retired to France, and a similar person who retired to iScotland, assuming (of course) that the rUK did not change the eligibility rules in a petty & discriminatory manner?

[Dawson Park Boy]

6 minutes ago, lichtgilphead said:

Please provide some links to credible sources to back up your claim.

The only UK Government statement I recall dates from 2014, when they admitted that pension entitlements would be unaffected by a yes vote.

If the post-indy Scotgov are responsible for funding & paying the pensions of all qualifying Scottish-domiciled citizens after that date, how could the UK Government make that claim? If it became a ScotGov responsibility on Indy Day, surely they would have said "That's a matter for a future ScotGov", wouldn't they.

Finally, can you please attempt to answer the question I asked in my previous post (and previously). Here it is again:

How would UK pension entitlement be different for someone who had worked in the UK and retired to France, and a similar person who retired to iScotland, assuming (of course) that the rUK did not change the eligibility rules in a petty & discriminatory manner?

I’ll leave DMCs to respond authoritatively but I would surmise that Scotland, as part of the UK, benefitted from the workers contributions to the national government and therefore should take on the pension paying liability whereas France received no benefit from the workers contributions and therefore has no liability.

No knowledge but just trying to use some common sense!!