New regulation 82A
18. After regulation 82 (option to buy out early payment reduction), insert—
“Option to partially buy out early payment reduction
82A.—(1) This regulation applies if—
(a)a member of this scheme becomes entitled under Chapter 2 to the immediate payment of a full retirement pension; and
(b)the member has not reached—
(i)normal pension age under this scheme; or
(ii)if applicable, the member’s effective pension age or enhanced effective pension age.
(2) The member may, with the consent of the Minister, opt under this regulation to buy out a proportion of the early payment reduction that would otherwise apply to the calculation of the annual rate of retirement pension.
(3) The cost must be met by way of a special payment to this scheme made by—
(a)the member;
(b)the member’s employer (“the employer”); or
(c)both the member and the employer.
(4) The employer may make a special payment using a lump sum payable to the member under a compensation scheme.
(5) Any special payment by the employer must be made—
(a)in accordance with the compensation scheme; or
(b)with the consent of the Minister.
(6) If the employer makes a special payment under paragraph (5)(a), the lump sum payable to the member under the compensation scheme is reduced by the amount of the special payment.
(7) The scheme manager, after consulting the scheme actuary, must determine the actuarial reduction that would apply if a member exercises the option under this regulation.
(8) Where a member exercises the option under this regulation, references in these Regulations to the early payment reduction apply as if the reference were to the actuarial reduction determined under this regulation.”.