Regulation 18 Payment of a lump sum instead of a pension

(1)

A relevant scheme may not provide for the payment of a lump sum instead of a pension that is attributable to section 9(2B) rights, unless the payment to be made is authorised under section 164 of the Finance Act (authorised member payments) and the payment is—

(a)

permitted by the lump sum rule in section 166 of the Finance Act and qualifies as—

(i)

a pension commencement lump sum for the purposes of paragraph 1 of Schedule 29 to that Act;

(ii)

a serious ill-health lump sum for the purposes of paragraph 4 of that Schedule;

(iii)

an uncrystallised funds pension lump sum for the purposes of paragraph 4A of that Schedule;

(iv)

a trivial commutation lump sum for the purposes of paragraph 7 of that Schedule; or

(v)

a winding-up lump sum for the purposes of paragraph 10 of that Schedule;

(b)

permitted by the lump sum death benefit rule in section 168 of the Finance Act and qualifies as a trivial commutation lump sum death benefit for the purposes of paragraph 20 of Schedule 29 to that Act; or

(c)

made by a registered pension scheme (within the meaning of section 150(2) of the Finance Act), is a payment that is described in Part 2 of the Registered Pension Schemes (Authorised Payments) Regulations 2009 (commutation payments), and is made to or in respect of a member.

(2)

Where, under the scheme—

(a)

an earner qualifies for a lump sum payment on the ground of serious ill-health; and

(b)

the earner’s widow, widower or surviving civil partner qualifies for a pension (“a survivor’s pension”),

the scheme is to continue to provide for a survivor’s pension notwithstanding the payment of a lump sum to the earner.