8(1)If—
(a)a pension credit derives from an occupational pension scheme,
(b)the scheme is one to which section 56 of the [1995 c. 26.] Pensions Act 1995 (minimum funding requirement for funded salary related schemes) applies,
(c)the scheme is underfunded on the valuation day, and
(d)such circumstances as the Secretary of State may prescribe by regulations apply,
paragraph 1(3) shall have effect in relation to the credit as if the reference to the amount of the credit were to such lesser amount as may be determined in accordance with regulations made by the Secretary of State.
(2)Whether a scheme is underfunded for the purposes of sub-paragraph (1)(c) shall be determined in accordance with regulations made by the Secretary of State.
(3)For the purposes of that provision, the valuation day is the day by reference to which the cash equivalent on which the amount of the pension credit depends falls to be calculated.