122.—(1) A member who becomes entitled to the payment for life of a full retirement pension or ill-health pension under this scheme may opt under this regulation to exchange part of the pension for a lump sum.
(2) An option under this regulation may only be exercised before the first payment of the pension is made.
(3) If a member exercises the option, for every £1 by which the amount of the member’s annual rate of full retirement pension or ill-health pension is reduced, the member must be paid a lump sum of £12.
(4) The lump sum may not be more than 25% of the amount advised by the scheme actuary as representing the cash value of the pension.
(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 section 241 of that Act)(1).
(6) If paragraph (7) applies, the member may opt to exchange only so much of the pension that exceeds the guaranteed minimum, multiplied by such factor as is indicated for a person of the member’s description in actuarial tables.
(7) This paragraph applies if the member has a guaranteed minimum under section 10 of the 1993 Act(2) in relation to the whole or part of a pension as a result of receipt by this scheme of a transfer payment from another pension scheme in respect of which the member had such a guaranteed minimum.
Section 241 was amended by the Finance Act 2006 (c.25) Schedule 21 paragraphs 2 and 9, the Finance Act 2007 (c.11) Schedule 19 paragraphs 1 and 15 and the Finance Act 2011 (c.11) Schedule 16 paragraphs 62 and 74.
Section 10 was amended by the Pensions (Northern Ireland) Order 1995 (S.I. 1995/3213) Arts.147, 168, Sch.3 para 20, Sch 5 Pt III, the Social Security Contributions (Transfer of Functions etc.) (Northern Ireland) Order 1999 (S.I.1996/671) Art.3(1) para 41 and the Proceeds of Crime Act 2002 (2002 c.29) para 23(3).