Option for pension credit member to commute whole pension (serious ill-health)N.I.
130.—(1) This regulation applies in relation to a pension credit member whom a selected medical practitioner certifies has a life-expectancy of less than 12 months.
(2) The pension credit member may opt to exchange the whole of the pension credit member's pension under this scheme for a lump sum.
(3) The option under this regulation (“this option”) may only be exercised—
(a)by written notice to the scheme manager; and
(b)before the first payment of the pension is made.
(4) The lump sum—
(a)is an amount equal to the total annual amount of the pension credit member's pension, multiplied by 5; and
(b)must be paid to the pension credit member as soon as is reasonably practicable after this option is exercised.
(5) In this regulation, “total annual amount” in relation to a pension credit member's pension means the total of—
(a)the annual rate of pension to which the member would be entitled apart from this option, calculated as at the date this option is exercised, but without subtracting the early payment reduction (if any); and
(b)the amount of increase (if any) in the annual rate of that pension under the 1971 Act calculated as at that date.
(6) the payment of a lump sum under this regulation in place of a pension discharges all liabilities under this scheme in respect of that pension.