Scottish defined benefit schemes would no longer be protected through the Pension Protection Fund in the event of a Yes vote in Septembers independence referendum, the Treasury has warned.

In a speech at a National Association of Pension Funds Investment conference in Edinburgh today, Chief Secretary to the Treasury Danny Alexander said government of an independent Scotland would have to set up its own protection fund. 'In fact, if Scotland were part of the European Union, they would have to set up such a fund,' he added.
The UK-based PPF would no longer protect Scotland-based members DB schemes that have become insolvent and are unable to meet their obligation, he said.
'But unlike now where the risks are spread across the UK, and across a large number of DB schemes the number of providers in an independent Scottish state would be much lower which would mean the costs of a scheme becoming insolvent being spread across a much smaller base.
'As the NAPF themselves have said this would be likely to create much higher costs. And I quote... "[Those] costs may have to be passed on to pension scheme members, eroding the value of their pension savings".'
He said a 'Yes' vote would cause a lot of uncertainty with Scots who built up their pension pots over a decade of hard work.
Alexander also stated that an independent Scotland would have its own regulatory framework and tax regimes. These may at first be similar to the UK but it is inevitable that they would diverge over time.
He continued: 'Experience shows us that - even in single market areas, like the EU - borders reduce flows of products, money and people. And it is very rare for certain financial products - like mortgages and pensions - to be sold across borders, even within the EU.
'So creating an international border would reduce financial firms' ability to spread risk and drive up the cost of financial products - like pensions - for Scottish households.'
According to Alexander, 70% of pension products bought by Scottish consumers in 2011/12, were from firms based in the rest of the UK. And 91% of pensions sold by Scottish firms were to non-Scottish customers.
In response, a PPF spokesman said: 'While we are following the current debate on the future of Scotland with close interest, the protection provided by the PPF is set out in legislation. Our future possible scope and role, in the event of Scottish independence is therefore a matter for government.'