A member may opt to exchange the whole or any part of the lump sum to which he would otherwise be entitled under this Part for an increase in the amount of pension payable to himself or to any other person under these Rules.

Where a member so opts, the pension in respect of which he exercises the option is to be increased as from the date it is otherwise payable by so much as in the opinion of the Scheme Actuary is equivalent in value to the amount of the whole or, as the case may be, the relevant part of the lump sum in question.

A member who has exercised the option under paragraph (1) ceases to be entitled to payment of so much of the lump sum as is affected by the option.

Paragraph (3) applies whether or not the pension that is to be increased as a result of the option actually becomes payable.

The option under this rule may only be exercised by giving notice in writing to the Scheme administrator, in such form as the Secretary of State requires, during the period of 6 months ending with the day on which the person becomes entitled to the lump sum in question.

For the purposes of this rule, the option is treated as having been exercised on the date on which it is received by the Scheme administrator.

Before a pension becomes payable to an active member, a deferred member or a pension credit member under this Part or at the time when a pension becomes payable under rule D.5 (early payment of benefits: serious ill-health), the member may opt to exchange the whole pension for a lump sum F1if the Secretary of State—

1. (a)

   is satisfied that the member is expected to live for less than one year, and

2. (b)

   has received evidence from a registered medical practitioner that that is the case.

Where F2an active member or a deferred member so opts, he is to be paid as soon as is reasonably practicable an amount equal to the amount of the annual pension, multiplied by 5.

Where a pension credit member so opts, he is to be paid as soon as is reasonably practicable an amount that in the opinion of the Scheme actuary is equivalent to the value of his pension credit rights.

In paragraph (2) “the amount of the annual pension” means the amount of the annual pension to which the member would be entitled under this Part apart from the option, calculated as at the time payment would otherwise first be due (but disregarding any service that the member might have accrued if he had continued in service until that time).

If the member has a guaranteed minimum under section 14 of the Pension Schemes Act 1993 in relation to service by reference to which he is entitled to the pension in question, paragraphs (1) to (3) only apply to so much of the pension as exceeds that guaranteed minimum.

The option under this rule may only be exercised by notice in writing to the Scheme administrator in such form as the Secretary of State requires.