8. In the case of a person who is entitled to preserved benefits to which he became entitled by virtue of regulation E2(1)(c) of the 1974 Regulations as applied by Part K of those Regulations—
(a)the preserved benefits (including any increases under the Pensions (Increase) Act 1971(1) and the Pensions (Increase) Act 1974(2)) are subject to reduction, but
(b)on return to local government employment previous service becomes reckonable on repayment of a sum equal to the amount of returned contributions,
as if regulations D1(2) (with the substitution for “the appointed day” of “1st April 1989”), D1(3) and K1(7) of the 1974 Regulations had continued to have effect.