Expect the unexpected in post Brexit Britain says Tim Middleton, PMI.

Nearly six months after the Brexit referendum, British politics continue to struggle with the consequences of its outcome.

Even now, there is a lack of clarity as to how and when the UK's departure from the European Union is to be implemented. Perhaps all that is known with certainty is that the Government was so confident of winning that it made no contingency plans for a 'leave' victory, and Theresa May now finds herself having to improvise an exit strategy.

The dramatic devaluation of Sterling has had an immediate impact on pension scheme funding, but the longer-term consequences for pension provision are harder to fathom.

For all the pro-Brexit hyperbole about the extent to which UK law has been dictated by Brussels, at this stage it seems unlikely that there will be much change.

Where a European Judgment has required changes to UK law, any subsequent change will require support from the Government, and it seems very possible that much European legal influences will be retained after Brexit.

In any event, any Great Repeal Bill is likely to focus on long-established shibboleths of the Tory right, such as preventing prisoners from voting, rather than recherch?© topics such as funding standards for Defined Benefit pension schemes.

There are; however, two subjects which are commonly mentioned where future UK pensions law might deviate from European requirements.

On 17 May 1990, the European Court judged that Douglas Harvey Barber had suffered discrimination on the grounds of his sex. The Judgment required that Guaranteed Minimum Pensions (GMPs) be equalised, although to this day it remains unclear as to how this might be achieved.

The dis-application of the Barber Judgment might remove the requirement for GMPs to be equalised, and if only from the perspective of pragmatism, this might prove an attractive option for the Government.

Another possible change might be the restoration of gender-based annuity rates. Ever since the Test Achats case introduced the requirement for equalisation, there has been an enduring criticism that the recognised differences between male and female mortality patterns had introduced a gender-based cross subsidy to the annuity market.

Reversing this might improve the image of an often-criticised sector of the pensions industry.

There is also a separate but related issue for the industry to consider.

One possible consequence of Brexit would be Scoxit, as momentum builds for a second Scottish independence referendum.

Were Scotland to secede for the existing UK, many existing UK pension schemes would become cross-border arrangements operating across the EU's border, and this would introduce new legal complexities.

The Brexit referendum had an unexpected outcome and has given rise to an unpredictable future. Its impact for pensions has been unsettling, and we should now prepare for perhaps a decade of uncertainty.

If nothing else, the lessons of June and November 2016 have taught us the importance of being able to expect the unexpected.

Written by Tim Middleton, Technical Consultant, PMI.