S T A T E O F N E W Y O R K
________________________________________________________________________
6663
2021-2022 Regular Sessions
I N A S S E M B L Y
March 23, 2021
___________
Introduced by M. of A. ABBATE -- (at request of the New York State
Teachers' Retirement System) -- read once and referred to the Commit-
tee on Governmental Employees
AN ACT to amend the retirement and social security law, in relation to
the maximum amount certain members of the New York state teachers'
retirement system may borrow against retirement contributions and to
making technical corrections thereto
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Subdivision a of section 517-b of the retirement and social
security law, as added by chapter 919 of the laws of 1990, is amended to
read as follows:
a. 1. A member of a teachers' retirement system 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 exceeding
seventy-five percent of the total contributions made pursuant to section
five hundred seventeen of this article (including interest credited at
the rate set forth in subdivision c of section five hundred seventeen
compounded annually) and not less than one thousand dollars.
2. A MEMBER OF THE NEW YORK STATE TEACHERS' RETIREMENT SYSTEM WHO
FIRST JOINS SUCH SYSTEM ON OR AFTER JULY FIRST, TWO THOUSAND TWENTY-TWO
IN ACTIVE SERVICE AND 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 FIVE HUNDRED SEVENTEEN OF
THIS ARTICLE (INCLUDING INTEREST CREDITED AT THE RATE SET FORTH IN
SUBDIVISION C OF THIS SECTION COMPOUNDED ANNUALLY); OR (II) FIFTY THOU-
SAND DOLLARS, WHICHEVER IS LESS.
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD10603-01-1
A. 6663 2
§ 2. Subdivision a of section 613-a of the retirement and social secu-
rity law, as added by chapter 919 of the laws of 1990, is amended to
read as follows:
a. 1. A member of a teachers' retirement system 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 exceeding
seventy-five percent of the total contributions made pursuant to section
six hundred thirteen of this article (including interest credited at the
rate set forth in subdivision c of section six hundred thirteen
compounded annually) and not less than one thousand dollars.
2. A MEMBER OF THE NEW YORK STATE TEACHERS' RETIREMENT SYSTEM WHO
FIRST JOINS SUCH SYSTEM ON OR AFTER JULY FIRST, TWO THOUSAND TWENTY-TWO
IN ACTIVE SERVICE AND 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 SIX HUNDRED THIRTEEN OF
THIS ARTICLE (INCLUDING INTEREST CREDITED AT THE RATE SET FORTH IN
SUBDIVISION C OF THIS SECTION COMPOUNDED ANNUALLY); OR (II) FIFTY THOU-
SAND DOLLARS, WHICHEVER IS LESS.
§ 3. Paragraph 2 of subdivision b of section 613-b of the retirement
and social security law, as added by chapter 303 of the laws of 2017, is
amended to read as follows:
2. A member of the New York state and local employees' retirement
system who first joins such system on or after January first, two thou-
sand 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 [five] SIX hundred
[seventeen] THIRTEEN of this [chapter] ARTICLE (including interest cred-
ited at the rate set forth in subdivision c of such section [five] SIX
hundred [seventeen] THIRTEEN compounded annually); or (ii) fifty thou-
sand dollars, whichever is less.
§ 4. Paragraph 2 of subdivision a of section 1207 of the retirement
and social security law, as added by chapter 303 of the laws of 2017, is
amended to read as follows:
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 [five] TWELVE
hundred [seventeen] FOUR of this [chapter] ARTICLE (including interest
credited at the rate set forth in subdivision c of [such] THIS section
[five hundred seventeen] compounded annually); or (ii) fifty thousand
dollars, whichever is less.
§ 5. This act shall take effect immediately; provided, however, that
sections three and four of this act shall be deemed to have been in full
force and effect on and after September 12, 2017.
FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
This bill would amend Section 517-b and Section 613-a of the Retire-
ment and Social Security Law to limit the amount of a loan that can be
A. 6663 3
taken by members of the New York State Teachers' Retirement System who
first join such system on or after July 1, 2022. The loan amount,
including the balances of any outstanding loans, may not exceed fifty
percent of the members' total contributions made including interest or
fifty thousand dollars, whichever is less. Members who joined prior to
July 1, 2022 will continue to have the current limit of seventy-five
percent of their total member contributions plus interest. Additionally,
a member must have one year of service to be eligible to take a loan,
the loan amount may not be less than one thousand dollars and such
member may borrow no more than once in a twelve-month period.
It is estimated that there will be no annual cost to the employers of
members of the New York State Teachers' Retirement System if this bill
is enacted, and in fact this bill would reduce the likelihood of members
hired on or after July 1, 2022 from defaulting on large loan balances at
retirement, thereby helping to protect the main purpose of the retire-
ment fund - to provide monthly pensions.
Member data is from the System's most recent actuarial valuation
files, consisting of data provided by the employers to the Retirement
System. Data distributions and statistics can be found in the System's
Comprehensive Annual Financial Report (CAFR). System assets are as
reported in the System's financial statements and can also be found in
the CAFR. Actuarial assumptions and methods are provided in the System's
Actuarial Valuation Report.
The source of this estimate is Fiscal Note 2021-2 dated October 14,
2020 prepared by the Actuary of the New York State Teachers' Retirement
System and is intended for use only during the 2021 Legislative Session.
I, Richard A. Young, am the Actuary for the New York State Teachers'
Retirement System. I am a member of the American Academy of Actuaries
and I meet the Qualification Standards of the American Academy of Actu-
aries to render the actuarial opinion contained herein.