Many cross-border charities could be forced to close if Scotland becomes independent because the split would trigger large pension debts, a pensions expert has warned.
David Davison, a pensions specialist at Spence & Partners, said European Union rules meant that defined-benefit pension schemes with members in different countries must be fully funded on a "technical provisions basis".
Schemes with members based in a single country are allowed to run a deficit providing they have a recovery plan.
Davison sits on the Institute of Chartered Accountants for Scotland pensions committee, which published a report earlier this year warning of the potential effect of independence on cross-border pension schemes.
On the basis of various pieces of research, it is believed that up to 2,000 charities have members in cross-border schemes, and those schemes collectively have debts worth hundreds of millions of pounds.
Almost all of these schemes are in deficit. Many of them have 10-year repayment plans to make up their deficits, but Davison said that if Scotland became independent they would have to make good the shortfalls immediately.
"A lot of charities wouldn’t be able to find the money, and some of them would end up closing as a result of this," he said. "This has the potential to be pretty catastrophic."
Among the affected schemes are the 1,500-member Growth Plan, a multi-employer defined-benefit scheme run by the Pensions Trust, as well as several other multi-employer schemes. Defined-benefit schemes run by large fundraising organisations will also be affected.
Figures released in 2010 by the actuarial firm Alexander Forbes showed that the 20 largest fundraising charities in the UK had a combined pension shortfall of £720m, although some of these organisations do not operate in Scotland.
Davison said that one solution for charities would be to split existing schemes into separate Scottish and English schemes. But he said this was a complex process and would still require higher levels of funding for both new schemes.
Another option would be to seek an extension from the EU that gave cross-border charities more time to become fully funded.
"The Republic of Ireland was given a three-year extension when it faced this problem," Davison said. "But that wouldn’t be anywhere near long enough for many charities."