2023 Laws of Puerto Rico › TITLE THREE - Executive (§§ 1 — 9311) › Chapter 33 - Retirement of Government Personnel (§§ 761 — 830q) › § 785a - Employees Retirement System—Loan collections and administration; credit priority

The Administrator is hereby empowered to collect, from any amount a participant is entitled to receive as a final liquidation for accrued regular vacation or sick leave owed by the agency, entity, or department in which he/she worked, or from the savings liquidation that the Puerto Rico Government Employee Association must make, or from the contributions or interest accrued on the System, any amount owed for personal, cultural, or mortgage loans, or loans originated as provided in § 785a of this title, by said participant when he/she permanently ceases or separates from service. Debts owed to the System on account of personal, cultural, or mortgage loans, or loans originated or acquired by a savings and credit union or the Cooperative Bank of Puerto Rico, as provided in § 785a of this title, shall have priority over any other debt of the participant. The Administrator shall determine the manner and conditions under which such loan amounts and any interest accrued thereon, with respect to the loans of the System, shall be collected.
Personal loans originated or acquired by a savings and credit unions of the Cooperative Bank of Puerto Rico up to the limit provided in § 785a of this title, and personal, mortgage, and cultural loans originated by the System shall be secured, with priority over any other debt, by the contributions made and those subsequently accrued in the System, the pension, benefit, or reimbursement exceeding the contributions designated by the participant or pensioner pursuant to §§ 785 and 779a of this title, and in the amount that, in case of death of the participant or pensioner, may correspond to his/her estate or any beneficiary as designated by him/her according to the provisions of §§ 779–779c of this title. The statutory lien created in this Section 4-110 shall remain in full force and effect in the event that mortgage or personal loans are transferred by the Administrator to third parties pursuant to §§ 779–779c of this title. Such contributions and amounts may be applied by the Administrator to the repayment of any debt owed on account of any loan that the participant or pensioner may have with the System, savings and credit unions or the Cooperative Bank of Puerto Rico upon their request. Pensioners shall pledge their pension annuities to secure their loans with the same priority that participants pledge their contributions, benefits, or reimbursements. The priority among the debts owed by participants or pensioners to the System, savings and credit unions, and the Cooperative Bank of Puerto Rico shall be determined based on the date on which such loans where granted.
If the personal, cultural, and mortgage loans granted by the System, and loans granted pursuant to the provisions of § 785 of this title, are in arrears, the Administrator (in the case of loans originated by the System), Savings and originated by these entities) shall grant the borrower, whether he/she is a participant or a pensioner, a term of 30 days through a written notice sent by certified mail, warning him/her that if he/she fails to pay or make the necessary arrangements with the System (in the case of loans originated by the System), savings and credit unions, or the Cooperative Bank of Puerto Rico (in the case of loans originated by these entities), such debt shall become due in its entirety, and the individual contributions of the participants, or the balance in their savings account shall be garnished and, whichever may be the case, applied to the debt. In the case of loans originated by savings and credit unions and the Cooperative Bank of Puerto Rico, the application, garnishment, and payment to the Cooperative Bank of Puerto Rico or the savings and credit unions shall be carried out by the Administrator within 60 days as of the request of the Cooperative Bank of Puerto Rico or savings and credit unions, such request shall include a certification of the Saving and Credit Union or the Cooperative Bank of Puerto Rico stating that 30 days have elapsed since the date on which the borrower, whether a participant or pensioner, was notified that the full payment of the amounts due has not been received.
In the collection notice, the Administrator (in the case of loans originated by the System), savings and credit unions, and the Cooperative Bank of Puerto Rico (in the case of loans originated by these entities) shall advice the participant of the consequences of the application of his/her individual contributions in relation to the benefits granted by the System. He/she shall also inform the participant of his/her right to return such contributions, with the corresponding interest, to restore the credits in years of service that such contributions represent, subject to the rules or restrictions established by the Administrator.
Loans granted by savings and credit unions and the Cooperative Bank of Puerto Rico may be administered by a program to be developed by the Cooperative Bank of Puerto Rico. As the Administrator of such program, the Cooperative Bank of Puerto Rico may act as the administrative agent of the savings and credit unions participating in such program, before the System and the employers, and shall be empowered to carry out payment transactions and collections with the System and the employers for loans granted by the savings and credit unions and the Cooperative Bank of Puerto Rico. The Cooperative Bank of Puerto Rico shall also coordinate with the savings and credit unions participating in the program to be established, the acquisition by the participants of the insurance policies required under § 785 of this title. However, the Cooperative Bank of Puerto Rico and the savings and credit unions that shall not participate in the program to be developed by the Cooperative Bank shall render a quarterly report including all the information requested by the Administration through a policy letter regarding the loans granted by savings and credit cooperatives and the Cooperative Bank of Puerto Rico, including payment and default status thereof.
History —May 15, 1951, No. 447, p. 1298, added as § 24-A on Feb. 16, 1990, No. 1, § 18; renumbered as § 4-110 on Sept. 24, 1999, No. 305, § 36; Mar. 27, 2003, No. 98, § 1; Sept. 2, 2003, No. 237, § 1; Sept. 18, 2011, No. 196, § 4.