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M3.—(1) This regulation applies where a person (“the former employee”)—
(a)has ceased to hold an employment in which he was a pensionable employee in consequence of a criminal, negligent or fraudulent act or omission on his part in connection with that employment;
(b)has incurred some monetary obligation, arising out of that act or omission, to the body who were his employing authority in that employment (“the former employing authority”); and
(c)is entitled to benefits under regulation E2(1).
(2) Where this regulation applies the former employing authority may recover or retain out of the fund an amount which (subject to any different agreement in writing between them and the former employee) does not exceed the lesser of—
(a)the amount of the monetary obligation; and
(b)the actuarial value, at the time of the recovery or retention, of all rights enjoyed by or in respect of the former employee under these regulations with respect to his previous service, other than rights enjoyed by virtue of the receipt of a transfer value from the scheme managers of a non-local government scheme.
(3) The Committee shall give the former employee not less than 3 months' notice of the amount to be recovered or retained under paragraph (2).
(4) The former employee is entitled to a certificate from the Committee showing the amount retained under paragraph (2), the manner in which it is calculated, and the effect of the recovery or retention on his benefits or prospective benefits.
(5) In the event of any dispute as to the amount to be recovered or retained under paragraph (2), the former employing authority are not entitled to recover or retain any amount except after the monetary obligation has become enforceable under an order of a competent court or the award of an arbitrator.
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