129.—(1) If, as a result of a member’s criminal, negligent or fraudulent act or omission, a loss to public funds occurs that arises out of or is connected with the member’s employment relationship with the member’s employer, the Department—
(a)may reduce any pension or other benefit payable to, or in respect of, the member under these Regulations by an amount less than or equal to the loss, or
(b)in a case where the loss equals or exceeds the value of the pension or other benefit, reduce them to nil or by any amount less than that value.
(2) Paragraph (1) does not apply so far as the pension or other benefit—
(a)is a guaranteed minimum pension or safeguarded rights which are derived from rights to such a pension, or
(b)arise out of a transfer payment.
(3) If the Department proposes to exercise the power under paragraph (1), the Department must give the member a certificate specifying the amount of the loss to public funds and of the reduction in benefits.
(4) If the amount of the loss is disputed, no reduction may be made under paragraph (1) until the member’s obligation to make good the loss has become enforceable—
(a)under the order of a competent court, or
(b)in consequence of an award of an arbitrator.
(5) If the loss is suffered by an employing authority, the amount of any reduction under paragraph (1) must be paid to that authority.