4.—(1) Except as hereinafter provided, this Part shall apply to a person who—
(a)enters, or before the operative date entered, local government employment within the prescribed period after ceasing to be employed in teaching service;
(b)before or within three months after entering local government employment or within six months after the operative date, whichever period shall last expire, or within such longer period as the fund authority may with the agreement of the Secretary of State in any particular case allow, notifies that authority in writing that he desires this Part to apply to him and furnishes that authority with particulars in writing of any national service in which he has been engaged since ceasing to be employed in teaching service; and
(c)within three months after entering local government employment or within six months after the operative date, whichever period shall last expire, or within such longer period as the fund authority may in any particular case allow, pays to that authority an amount equal to any repaid contributions paid to him after he last ceased to be employed in teaching service, together with any compound interest thereon payable in accordance with paragraph (2) below.
(2) For the purposes of paragraph 1(c) above—
(a)compound interest shall not be payable unless the period between a person's ceasing to be employed in teaching service and entering local government employment exceeds one year;
(b)compound interest shall be calculated on the amount of the repaid contributions at three per cent per annum with half-yearly rests from the day one year after that on which the person ceased to be employed in teaching service or from the day on which repaid contributions were paid to him, whichever shall be the later, to the day on which he notified the fund authority as required by paragraph (1)(b) above; and
(c)if the amount of compound interest calculated as aforesaid exceeds a sum equal to one half of the difference between the amount of the transfer value payable under rule 6 and the amount of the transfer value which would have been so payable if calculated by reference to the person's age on ceasing to be employed in teaching service, it shall be reduced to that sum.