As someone who is sweating under a temporary med cat at the moment, my understanding is.....
Perm loss of flying med cat means removal from the PAS. You will be offered employment in another suitable ground branch (Ops Support?) together with the subsequent loss of pay, or you can opt for medical discharge. If the med cat is also unsuitable for ground duties then you will get the medical discharge. I am unsure as to what happens to your pension if you choose medical discharge over a ground branch. Is it the same rules as PVR, leading to part pension until age 65 then another lump sum, or do you get the full pension from leaving? But that's another question.