40.—(1) The amount of a repayment to a member (M) pursuant to regulation 39 is—
(a)if the 1993 Act condition applies, the amount to which M is entitled to be paid pursuant to Chapter 5 of Part 4 of that Act, less the appropriate deductions;
(b)if the short service condition applies, an amount equal to the sum of the contributions paid by M, less the appropriate deductions.
(2) The appropriate deductions are—
(a)so much of the contributions equivalent premium paid in respect of M as is permitted pursuant to section 57 of the 1993 Act M1;
(b)an amount equal to the income tax payable under section 205 of the 2004 Act M2 (short service lump sum charge) as a result of the repayment.
(3) M is entitled to interest on the amount of the repayment unless M's pensionable service ceases because M's employment is terminated—
(a)pursuant to M's contract of employment;
(b)at M's request; or
(c)by reason of misconduct or inefficiency.
(4) The rate of interest is 2.5% per year calculated on a compound basis with yearly rests.
(5) Interest is payable in respect of the period starting on 1st April following the day when M started to pay contributions and ending on the day M leaves pensionable service.
(6) Paragraphs (4) and (5) do not apply if—
(a)regulation 39(1)(a) applies; and
(b)M is entitled to a greater amount of interest under Chapter 5 of Part 4 of the 1993 Act.
(7) So far as contributions paid by M were paid under another scheme and were included in a transfer payment to this scheme—
(a)interest for the period before the transfer period was made is calculated in accordance with the other scheme (subject to any enactment applicable to the transfer); and
(b)paragraphs (4) and (5) do not apply as respects that period.
Marginal Citations
M1Section 57 was amended by S.I. 1995/3213 (N.I. 22) Article 147 and Schedule 3 and 2000 c.19 section 56 and Schedule 5
M2Section 205 has been amended by section 219(1) of, and paragraphs 119 and 121 of Schedule 46 to, the Finance Act 2013 (c.29) and by Article 3 of S.I. 2010/536