3.—(1) The Occupational Pension Schemes (Discharge of Liability) Regulations 1997(1) are amended as follows.
(2) In regulation 4(2) (conditions on which policies of insurance and annuity contracts may be commuted)—
(a)in paragraph (1)(b), at the end insert “; or”;
(b)after paragraph (1)(b) insert—
“(c)subject to paragraph (2A)—
(i)the benefits secured by the policy of insurance or annuity contract have become payable;
(ii)the earner requests or consents to the amount secured by the policy of insurance or annuity contract being paid as a lump sum; and
(iii)that payment does not exceed the amount for the time being permitted for a lump sum payment by the lump sum rule in section 166 of the Finance Act 2004(3) and qualifies as a pension commencement lump sum for the purposes of paragraph 1 of Part 1 of Schedule 29 to that Act.”; and
(c)after paragraph (2) insert—
“(2A) The commutation referred to in paragraph (1)(c) does not apply to that part of the benefits which consist of the earner’s and the earner’s widow’s, widower’s or surviving civil partner’s guaranteed minimum pensions.”.