NY Ret & SS L § 1207 (2021)
2021 New York Laws RSS - Retirement and Social Security Article 22 - Police and Fire Retirement Provisions 1207 - Loans to Members.

§  1207.  Loans to members. a. 1. Notwithstanding any general, special   or local law to the contrary, a member in active service who has  credit   for  at  least  one year of member service may borrow, no more than once   within each twelve month period, an amount  not  exceeding  seventy-five   percent  of  the  total  contributions  made  pursuant to section twelve   hundred four of this article or any other article of  this  chapter  and   not less than one thousand dollars.2. A member who first joins such system on or after January first, two   thousand eighteen in active service who has credit for at least one year   of member service may borrow, no more than once during each twelve month   period,  an  amount,  not less than one thousand dollars and which would   not cause the balance owed  pursuant  to  this  section,  including  any   amounts  borrowed  then  outstanding, to exceed (i) fifty percent of the   member's total contributions made pursuant  to  section  twelve  hundred   four  of this article (including interest credited at the rate set forth   in subdivision c of this section compounded  annually);  or  (ii)  fifty   thousand dollars, whichever is less.b. An amount so borrowed, together with interest on any unpaid balance   thereof,  shall  be  repaid in equal installments which shall be made by   the borrower directly  to  the  retirement  system  or  through  regular   payroll  deduction.  Such  installments  shall  be in such amount as the   retirement system shall approve; however, they shall be at least (a) two   percent of the member's contract salary, and (b) sufficient to repay the   amount borrowed, together with  interest  on  unpaid  balances  thereof,   within  a  period  not in excess of five years. In the event of default,   the retirement system shall be authorized to collect such  payments  due   from  the  employer  of  such  member through payroll deduction and such   member  shall  forfeit  all  future  entitlement  to  borrow  from   the   retirement  system  until  the unpaid balance of the loan outstanding at   the time of default is fully paid. The retirement system, at  any  time,   may  accept  payments  on  account  of  any  loan  in  addition  to  the   installments fixed for repayment thereof. All payments of principal  and   interest at the rates set forth in subdivision c of this section made by   the  member  shall  be  credited  to  his or her account as principal or   interest. Any additional interest paid by the member shall  be  credited   to the appropriate fund of the retirement system.c.  The  rate  of  interest  payable  upon loans made pursuant to this   section shall be one percent less than the valuation  rate  of  interest   adopted  for  such  system.  Whenever  there is a change in the interest   rate, it shall be applicable to loans made  or  renegotiated  after  the   date of such change in the interest rate.d.  A  service charge payable upon loans made pursuant to this section   shall be set by the retirement system in an amount sufficient  to  cover   the  cost  to  the  retirement  system  of administering the loans. Such   charge shall be paid to the retirement system when the loan is  made  or   in  equal  installments  over  the  period  the loan is outstanding. The   amount of the service charge shall be credited to the  fund  from  which   administrative expenses are paid.e. 1. Each loan made pursuant to this section shall be insured against   the  death  of  the  member in an amount equal to the amount of the loan   outstanding at any given time; with the exception that until thirty days   have elapsed after the making thereof, no part  of  the  loan  shall  be   insured. Such insurance shall be provided by the retirement system. Upon   the  death  of  the  member, the amount of insurance so payable shall be   credited to his or her account. The premium payable by  the  member  for   such  insurance  shall  be set by the retirement system at a rate not to   exceed one percent of the amount loaned. 2. Such premium shall be prorated to July first next,  or  such  other   date fixed by the retirement system as is appropriate, and shall be paid   to  the  retirement  system in equal installments over the period of the   loan.  Thereafter, a premium not to exceed one percent per annum of  the   present  value  of  the outstanding loan as of July first, or such other   appropriate date, shall be paid in the same manner each succeeding  year   until such loan is repaid or the member is retired.3. The retirement system shall, at least annually, review such premium   rate, and may, in its discretion, increase or reduce the premium, modify   the  terms  or  conditions  of coverage, or discontinue the insurance of   loans. In no event shall this subdivision impose any obligation upon the   retirement system to continue to insure loans of members upon the  terms   and conditions herein provided or upon any other terms or conditions.f. The retirement system is authorized to establish such special funds   as  may be necessary to carry out the provisions of subdivisions d and e   of this section.g. Whenever a member of such a retirement system, for whom a  loan  is   outstanding,  becomes entitled to the return of his or her contributions   because of withdrawal from such system or because of death,  the  amount   of  any  loan  outstanding  on  such date, including accrued interest as   provided in subdivision d of this section, shall be construed to already   have been returned to such member and the  refund  of  contributions  to   which  he  shall  then  be  entitled  shall  be  the  net amount of such   contributions together with interest thereon.h. Notwithstanding  any  general  or  special  law  to  the  contrary,   whenever  a  member  of  the  retirement  system,  for  whom  a  loan is   outstanding, retires, the retirement allowance payable without  optional   modification  shall  be  reduced  by a life annuity which is actuarially   equivalent to the amount of the outstanding loan (all outstanding  loans   shall  continue  to accrue interest charges until retirement), such life   annuity being calculated utilizing the  interest  rate  on  thirty  year   United States treasury bonds as of January first of the calendar year of   the  effective  date  of retirement and the mortality tables for options   available under section five hundred fourteen of this chapter.i. The retirement system shall adopt such rules and regulations as  it   finds to be necessary in administering the provisions of this section.j.  The  retirement system shall discharge any evidence of a loan to a   member pursuant to this section upon the satisfaction of the  obligation   of the member thereunder.k.  The  retirement  system  shall  have no right to bring suit in any   court against any member to enforce the amount due under  this  section,   and  the  retirement  system's  sole  remedy  upon  death, retirement or   withdrawal shall be to offset the amount outstanding including  interest   from  the  member's account or other benefits payable to or on behalf of   the member as provided in this section.