PART 3ADDITIONAL REQUIREMENTS IN RELATION TO RIGHTS ATTRIBUTABLE TO CONTRACTED-OUT EMPLOYMENT ON AND AFTER 6TH APRIL 1997
Payment of a lump sum instead of a pension18
1
A relevant scheme49 may not provide for the payment of a lump sum instead of a pension that is attributable to section 9(2B) rights, unless the payment to be made is authorised under section 164 of the Finance Act50 (authorised member payments) and the payment is—
a
permitted by the lump sum rule in section 166 of the Finance Act51 and qualifies as—
i
a pension commencement lump sum for the purposes of paragraph 1 of Schedule 2952 to that Act;
ii
a serious ill-health lump sum for the purposes of paragraph 4 of that Schedule53;
iii
an uncrystallised funds pension lump sum for the purposes of paragraph 4A of that Schedule54;
iv
a trivial commutation lump sum for the purposes of paragraph 7 of that Schedule55; or
v
a winding-up lump sum for the purposes of paragraph 10 of that Schedule56;
b
c
made by a registered pension scheme (within the meaning of section 150(2) of the Finance Act), is a payment that is described in Part 2 of the Registered Pension Schemes (Authorised Payments) Regulations 200959 (commutation payments), and is made to or in respect of a member.
2
Where, under the scheme—
a
an earner qualifies for a lump sum payment on the ground of serious ill-health; and
b
the earner’s widow, widower or surviving civil partner qualifies for a pension (“a survivor’s pension”),
the scheme is to continue to provide for a survivor’s pension notwithstanding the payment of a lump sum to the earner.