4.—(1) Subject to paragraphs (2) and (3) and regulation 9 of the Pension Sharing (Safeguarded Rights) Regulations 2000, the circumstances in which part of the pension credit benefit may be commuted for the purposes of section 101C(2) of the 1993 Act (payment of pension credit benefit in the form of a lump sum before normal benefit age) are—
(a)that the person entitled to the pension credit benefit—
(i)subject to paragraph (2), is suffering from an incapacity prior to normal benefit age; or
(ii)has reached the age of 50; and
(b)that the commutation would not prevent approval or continuing approval of the scheme under section 591 of the Taxes Act(1) (discretionary approval).
(2) Paragraph (1)(a)(i) applies where the person entitled to the pension credit benefit—
(a)is an active member of the occupational pension scheme in which his pension credit rights are held; and
(b)has become entitled to the early payment of benefits derived from his accrued rights, other than his pension credit rights, in that scheme as a result of his incapacity prior to normal benefit age.
(3) Safeguarded rights which are held in a money purchase contracted-out scheme shall not be commuted where the circumstances specified in paragraph (1)(a) apply.
(4) This regulation does not apply to an occupational pension scheme which is approved under section 590 of the Taxes Act.
Section 591 was amended by section 146 and paragraphs 1 and 6 of Part I of Schedule 13 to, the Finance Act 1988, sections 107 and 258 of, and paragraph 12 of Part V of Schedule 26 to, the Finance Act 1994 (c. 9), and sections 59(1), (2), and 60(1) of the Finance Act 1995 (c. 4).