D4RP
The answer to your question on lump sum:
Statutory Instrument 2005 No 438, Part D, Rule D4, para 6:
"If a member exercises the option under this rule, the amount of the lump sum to which he becomes entitled is first calculated as mentioned in rule D.2(4) or, as the case may be, rule D.3(5) and then the amount is reduced by such amount as the Secretary of State determines after consultation with the Scheme actuary."
Hence, yes the lump sum is also actuarially reduced.
Hope that clears it up. Probably not what you were hoping to hear. Sorry.
Regards
Ginseng