3.—(1) Where a person becomes or has become a pensionable employee of an Isle of Man authority after having ceased to be subject to the Act of 1937, and these rules have become applicable in relation to him, the authority or body by whom he was employed may, within three months after the date on which they are informed by the Isle of Man authority of his notification that he desires these rules to apply to him, resolve that the whole or any part of his non-contributing service (if any) shall be reckonable as contributing service.
(2) Where a person becomes or has become a pensionable employee of an Isle of Man authority after having ceased to be subject to the Act of 1937 or a local Act scheme, and these rules have become applicable in relation to him, then, if the Act of 1937 or any local Act modifying the Act of 1937 or the local Act scheme conferred a discretion on the authority or body by whom he was employed or the authority administering the scheme to which he was subject, as the case may be, in calculating any benefit to which that person might have become entitled on ceasing to be employed, to add a number of years to the number of years which that person had actually served in the aggregate, that authority or body may, within three months after the date on which they are informed by the Isle of Man authority of his notification that he desires these rules to apply to him, exercise that discretion in relation to him, notwithstanding that he has not become entitled to that benefit.
(3) Where a person becomes or has become a pensionable employee of an Isle of Man authority after having ceased to be subject to the Act of 1937, and these rules have become applicable to him in relation to that employment, then, if a scheme modifying the Act of 1937 conferred a discretion on the local authority by whom he was formerly employed to increase in respect of any period of service the rate for the calculation of any benefit to which he might have become entitled on ceasing to be employed, and that period of service would but for the provisions of this paragraph be reckonable at a fraction of its actual length for the purpose of calculating the transfer value payable by the authority under rule 2 of these rules, the authority may, within three months after they are informed by the Isle of Man authority of his notification, resolve that that period of service shall for that purpose be reckonable at its full length.
(4) For the purposes of the last preceding rule, any period of non-contributing service of a person in respect of which a resolution has been passed under paragraph (1) of this rule, and any number of years added to a person's service under either paragraph (1) or (2) shall be deemed to be a period of service which that person was entitled to reckon immediately before ceasing to hold his former employment as a period of contributing service for the purposes of the Act of 1937 or as a period of service for the purposes of the local Act scheme, as the case may be.
(5) Where the amount of any transfer value payable under the last preceding rule is increased in consequence of the exercise by an authority or body of any power conferred upon them by paragraph (1), (2) or (3) of this rule, that authority or body shall repay the amount of the said increase to the superannuation fund out of which the transfer value is payable.