The Public Service (Civil Servants and Others) Pensions Regulations 2014

Option to buy out early payment reduction

82.—(1) This regulation applies if—

(a) a member of this scheme becomes entitled under Chapter 2 or 3 to the immediate payment of a full retirement pension or a partial retirement pension; and

(b) the member has not reached—

(i) normal pension age under this scheme; or

(ii) if applicable, the member’s effective pension age or enhanced effective pension age.

(2) The member may opt under this regulation to buy out the early payment reduction that would otherwise apply to the calculation of the annual rate of retirement pension.

(3) The cost must be met by way of a special payment to this scheme made by—

(a) the member;

(b) the member’s employer (“the employer”); or

(c) both the member and the employer.

(4) The employer may make a special payment using a lump sum payable to the member under a compensation scheme.

(5) Any special payment by the employer must be made—

(a) in accordance with the compensation scheme; or

(b) with the consent of the Minister.

(6) If the employer makes a special payment under paragraph (5)(a)—

(a) the lump sum payable to the member under the compensation scheme is reduced by the amount of the special payment; and

(b) if the amount of the special payment is more than the whole of the lump sum payable to the member under the compensation scheme, any difference is not chargeable to the member.

(7) The cost of buying out the early payment reduction is an amount determined by the scheme manager after consulting the scheme actuary.