3.—(1) Subject to paragraph (3), a person in pensionable employment may elect to pay contributions under these Regulations for one or both of the following purposes—
(a)for investment under regulation 7(1) to provide for an annuity payable on retirement; or
(b)in accordance with regulation 7(2) to provide for a lump sum death benefit.
(2) An election under under paragraph (1) may relate to contributions to be paid by, or on behalf of, the contributor, or contributions to be paid by the contributor’s employer, or both.
(3) If the person making an election—
(a)under paragraph (1)(b) is on leave of absence from his employment due to ill health on the date on which the notice of such an election is received by the Secretary of State; or
(b)under paragraph (1)(a) or (b) is not receiving tax relief under section 594(1) of the Taxes Act(1) (exempt statutory schemes) or otherwise in respect of contributions paid under regulation D1 of the Pension Scheme Regulations (contributions by members)(2) on the date on which the notice of such an election is received by the Secretary of State,
such an election shall not have effect.
(4) An election under paragraph (1) shall be made by giving written notice to the Secretary of State which shall specify—
(a)whether the election is with a view to investment under regulation 7(1) of regulation 7(2), or both;
(b)the amount of contributions; and
(c)in relation to contributions for the purpose of investment under regulation 7(1), the authorised fund or funds in which the contributions are to be invested.
(5) The Secretary of State shall not accept an election under paragraph (1)—
(a)where any limit imposed by regulation 4(4) or (5), or 13 (limits on contributions and benefits) would be exceeded; or
(b)in the case of an election for the purposes of paragraph (1)(b), unless he is satisfied that—
(i)the person making the election has complied with the requirements of regulation 16(2) (provision of information); and
(ii)at the time of making an election the person is in good health; and
(iii)there is not reason why his health should prevent him from making contributions.
(6) Subject to paragraph (5)(b) above and regulation 4(4)—
(a)where contributions are paid for the purposes of paragraph (1)(b)—
(i)until the contributor reaches his 60th birthday; and
(ii)on reaching his 60th birthday he continues to be in pensionable employment,
the contributor may elect for further contributions to be paid until he reaches his 61st birthday; and
(b)a person to whom paragraph (a) above applies may continue to elect annually for further contributions to be paid provided he continues to be in pensionable employment.
(7) For the purposes of paragraph (1) or (6) of this regulation, an election shall have effect from the date when it is accepted by the Secretary of State.
(8) The Secretary of State shall notify in writing the person who has made an election under paragraph (1), of the Secretary of State’s acceptance of that election.
Section 594 was amended by section 75 of, and paragraphs 1, 6, 18(1) and (4) of Part I of Schedule 6 to, the Finance Act 1989 (c. 26).
Regulation D1 was amended by S.I. 1998/2216.