Subject to the provisions of these Regulations, in respect of any participant in an insurance scheme who loses his employment as an officer or servant in consequence of the relevant event, the cause of such loss having arisen within the relevant period, the Commission may, not later than three months after the date upon which he so loses his employment, make such arrangements with the persons administering the scheme and the life assurance company concerned as shall ensure to or in respect of the participant on his reaching the relevant age, or on the happening of any other contingency carrying entitlement to pension under the scheme, the payment or payments comprised in his accrued pension rights.

Any arrangements made under paragraph (1) of this Regulation shall, in any case where the payments to be ensured thereunder to or in respect of an officer or servant on his reaching the relevant age do not exceed £13 per annum, provide that the life assurance company may, at any time within three months of the making of the arrangements, discharge their liability thereunder by paying to or in respect of the officer or servant concerned a lump sum equal in amount to the estimated capital value of his accrued pension rights as at the date on which the option is exercised determined in such manner as may be provided by the arrangements so made, and adjusted, in such manner as may be provided by the arrangements, in respect of any sums which the persons administering the scheme may become liable to pay by way of income tax in consequence of the payment of the said lump sum.

Notwithstanding anything to the contrary in such scheme as aforesaid or any statutory provisions relating thereto or trust deeds, rules or other instruments made for the purposes thereof, the persons administering the scheme and the life assurance company concerned shall be authorised to make such arrangements (including the disposal of any funds held for the purposes of the scheme) as are referred to in paragraph (1) of this Regulation and the said scheme, statutory provisions, trust deeds, rules and other instruments shall be construed accordingly and as though provision was duly made in the scheme for any arrangements so made.