Sponsored by:
Assemblyman NELSON T. ALBANO
District 1 (Cape May, Atlantic and Cumberland)
Assemblyman MATTHEW W. MILAM
District 1 (Cape May, Atlantic and Cumberland)
Assemblyman JOSEPH VAS
District 19 (Middlesex)
SYNOPSIS
Permits PFRS retiree to borrow from life insurance benefit amount equal to no more than 50% of benefit’s total value.
CURRENT VERSION OF TEXT
As introduced.
An Act permitting certain loans to retirees of the Police and Firemen’s Retirement System of New Jersey and supplementing P.L.1964, c.241.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. Any member who has retired from the retirement system may borrow from the value of the retiree’s death benefit, an amount equal to not more than 50% of the total value of the policy, but not less than $50. The amount so borrowed, together with interest at the rate of 4% per annum on any unpaid balance thereof, shall be repaid in equal installments by deductions from the retirement benefit received by the retiree or shall be repayable in a lump sum amount at least equal to the retiree’s rate of contribution to the retirement system prior to the member’s retirement. Not more than two loans may be granted to any retiree in any calendar year and the additional deduction required to repay such loans shall be calculated by the State Treasurer.
In the event that a retiree dies before the outstanding balance of the loan and interest thereon has been repaid, the remaining balance shall be repaid from the proceeds of any other benefits payable on the account of the retiree either in the form of monthly payments due to the retiree’s beneficiaries or in the form of lump sum payments payable for group life insurance.
2. This act shall take effect immediately.
STATEMENT
This bill permits any Police and Firemen’s Retirement System (PFRS) retiree to borrow from the value of the retiree’s death benefit, an amount equal to not more than 50% of the total value of the policy, but not less than $50. The amount so borrowed, together with interest at the rate of 4% per annum on any unpaid balance thereof, must be repaid in equal installments by deductions from the retirement benefit received by the retiree or may be repayable in a lump sum amount at least equal to the member's rate of contribution to the retirement system prior to the member’s retirement.
In the event that a retiree dies before the outstanding balance of the loan and interest thereon has been repaid, the remaining balance must be repaid from the proceeds of any other benefits payable on the account of the retiree either in the form of monthly payments due to his or her beneficiaries or in the form of lump sum payments payable for group life insurance.