Regulation 59 General option to exchange part of the pension for lump sumI1

A member may opt to exchange part of a pension to which the member would otherwise be entitled for a lump sum.

If a member so opts, for every £1 by which the amount of the member’s annual rate of pension is reduced, the member is to be paid a lump sum of £12.

A member may not exchange pension for lump sum under this regulation to the extent that it would result in a scheme chargeable payment for the purpose of Part 4 of the FA 2004 (see section 241 of that Act).

This regulation does not apply to a pension derived from pension credit rights if the pension debit member from whose rights the pension is derived has exercised the option before the date on which the pension sharing order takes effect.

The option under this regulation must be exercised by notice in writing to the scheme administrator in such form as the scheme manager requires no earlier than 6 months and no later than 1 month before the first pension payment is made.

An option exercised under paragraph (1) must apply to added pension and earned pension to which a member is entitled in equal proportions.