PART 4Contributions
CHAPTER 2Refund: short service
Amount of refund40
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.