Regulation 2.D.14 General option to exchange part of pension for lump sum

England and Wales

F1(1)

A member (other than a pension credit member whose rights under F2this Section of the Scheme are attributable to a disqualifying pension credit for the purpose of paragraph 2 of Schedule 29 to the 2004 Act) may opt to exchange part of a pension to which the member would otherwise be entitled for a lump sum.

(2)

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

(3)

An option under paragraph (1) must relate to an annual amount of pension that is a whole number of pounds (and accordingly the lump sum will be exactly divisible by 12).

(4)

In paragraphs (2) and (3) “annual amount”, in relation to a pension, means the amount of the annual pension to which the member would be entitled under this Chapter apart from the option, together with any increases payable under the Pensions (Increase) Act 1971^f1, calculated as at the time payment would first be due.

(5)

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 purposes of Part 4 of the 2004 Act (see, in particular, section 241 of, and paragraph 1 of Schedule 29 to, that Act).

(6)

If the member has a guaranteed minimum under section 14 of the 1993 Act in relation to the whole or part of a pension, paragraph (1) only applies to so much of the pension as exceeds that guaranteed minimum, multiplied by such factor as is indicated for a person of the member’s description in tables provided by the Scheme actuary.

(7)

The option under this regulation may only be exercised by giving notice in writing to the scheme administrator in such form as the Secretary of State requires—

(a)

at the time of claiming the pension, or

(b)

before such later time as the scheme administrator specifies in writing.

F3This is subject to paragraphs (8) and (9).

F4(8)

If the pension is an ill-health pension under regulation 2.D.8, the option under this regulation may only be exercised by giving notice in writing to the scheme administrator in such form as the Secretary of State requires—

(a)

where the member is awarded—

(i)

a tier 1 ill-health pension under paragraph (2) of that regulation, at the time of claiming that tier 1 ill-health pension,

(ii)

a tier 2 ill-health pension under paragraph (3) of that regulation, at the time of claiming that tier 2 ill-health pension; or

(b)

before such later time as the scheme administrator specifies in writing.

(9)

If the pension is a tier 2 ill-health pension under regulation 2.D.9, in substitution for a tier 1 ill-health pension under regulation 2.D.8, the option under this regulation may only be exercised—

(a)

in relation to the difference between the tier 1 ill-health pension that ceases to be payable in accordance with paragraph (3) of regulation 2.D.9 and the tier 2 ill-health pension to which the member becomes entitled under that paragraph, and

(b)

by giving notice in writing to the scheme administrator in such form as the Secretary of State requires—

(i)

at the time of award of the tier 2 ill-health pension under that paragraph, or

(ii)

before such later time as the scheme administrator specifies in writing.

F5(10)

In the case of a 2008 Section Optant, this regulation is subject to paragraph (4) of regulation 2.K.8 and regulation 2.K.12.

Annotations

Textual amendments

F1: Reg. 2.D.14(1) substituted (1.4.2009 with effect from 6.4.2009) by The National Health Service Pension Scheme and Injury Benefits (Amendment) Regulations 2009 (S.I. 2009/381), regs. 1(2)(3), 32(a) (with reg. 89)
F2: Words in reg. 2.D.14(1) inserted (1.10.2009) by The National Health Service Pension Scheme, Injury Benefits and Additional Voluntary Contributions (Amendment) Regulations 2009 (S.I. 2009/2446), reg. 1(2), Sch. 2 para. 1
F3: Words in reg. 2.D.14(7) added (1.4.2009) by The National Health Service Pension Scheme and Injury Benefits (Amendment) Regulations 2009 (S.I. 2009/381), regs. 1(2), 32(b) (with reg. 89)
F4: Reg. 2.D.14(8)(9) added (1.4.2009) by The National Health Service Pension Scheme and Injury Benefits (Amendment) Regulations 2009 (S.I. 2009/381), regs. 1(2), 32(c) (with reg. 89)
F5: Reg. 2.D.14(10) inserted (1.10.2009) by The National Health Service Pension Scheme, Injury Benefits and Additional Voluntary Contributions (Amendment) Regulations 2009 (S.I. 2009/2446), regs. 1(2), 33

Footnotes

f1: 1971 c. 56.