PART 7 U.K.Retirement benefits

CHAPTER 6U.K.Payment options

Option to buy out early payment reductionU.K.

122.—(1) This regulation applies if a member of this scheme claims payment of a full retirement pension under Chapter 2 and—

(a)if the member is an active member, the member has not reached normal pension age under this scheme; or

(b)if the member is a deferred member, the member has not reached the member's state pension age.

(2) The member may opt under this regulation to buy out [F1all or part of] the early payment reduction that would otherwise apply to the calculation of the annual rate of full retirement pension.

(3) The cost [F2to buy out all or part of the early payment reduction] must be met by way of a special payment to this scheme—

(a)made by the member;

(b)made by the employer of an active member or a deferred member in eligible service (“the employer”); or

(c)made partly by the member and partly by the employer.

(4) The employer, in relation to an active member or a deferred member in eligible service, may make a special payment using a lump sum payable to the member under the compensation scheme if the employer determines that such a payment would assist the economical, effective and efficient management of its functions having taken account of the costs likely to be incurred in the particular case.

[F3(4A) A special payment under paragraph (4) is subject to any restriction imposed by regulations made under section 153A of the Small Business, Enterprise and Employment Act 2015 (regulations to restrict public sector exit payments) that applies at the time that the payment is to be made.]

(5) Any special payment by the employer must be made—

(a)in accordance with the compensation scheme; or

(b)with the consent of the Secretary of State.

(6) If the employer makes a special payment under paragraph (5)(a)—

(a)the lump sum payable to the member under the compensation scheme is reduced by the amount of the special payment; and

(b)if the amount of the special payment is more than the whole of the lump sum payable to the member under the compensation scheme, any difference is not chargeable to the member.

(7) The cost of buying out the early payment reduction is an amount determined by the scheme manager in accordance with actuarial guidance.

(8) Any special payment made by a member must be made in accordance with the requirements of the scheme manager.

(9) In this regulation, “the compensation scheme” means the scheme contained in the determination made under regulation 14A of the 2003 Regulations (Annex DA) providing for payment of a compensation lump sum to a member of a police force on voluntary retirement.

Textual Amendments