Payment by the Department
16.—(1) Where pursuant to an election made under regulation 12(5) or 13(3) the Department purchases a pension policy from an authorised provider other than an authorised insurance company selected by it, the Department shall not, except in the circumstances described in paragraph (2), be liable for payment of any pension under that policy.
(2) Where pursuant to an election under regulation 5(2) or 12(5) or pursuant to regulation 12(8) or 13(4) the Department purchases a pension policy from an authorised insurance company selected by it the Department shall be liable to make to the person entitled to it any payment of pension under the policy which has not been made by that authorised insurance company.
(3) If when a participator dies a lump sum would have been payable under regulation 13 but the whole or part of that sum cannot be paid under that regulation by reason of regulation 14 and paragraph 14 of the Schedule the Department shall pay to the participator’s personal representatives the amount which cannot be paid under regulation 13, so far as it does not exceed the prescribed amount, but subject to any deduction of tax under paragraph (7).
(4) If by reason of regulation 14 and the Schedule a pension provided under regulation 12 is not payable in full, the Department shall pay to the participator an amount, or aggregate of amounts, not exceeding the prescribed amount, out of the investments realised by virtue of regulation 12(7) which would otherwise have been applicable to the purchase of the pension but subject to any deduction of tax under paragraph (7).
(5) In paragraphs (3) and (4) the reference to the prescribed amount is to an amount calculated in accordance with the method for the time being specified in regulations made for the purposes of section 591 of the Taxes Act as the method to be used for calculating the amount of any surplus funds.
(6) The amount of any tax chargeable under the Taxes Act on payments made under these Regulations shall be deducted by the Department before payment to the participator or his personal representatives as the case may be.