ASSEMBLY STATE GOVERNMENT COMMITTEE

STATEMENT TO

ASSEMBLY, No. 2285

STATE OF NEW JERSEY

DATED: JANUARY 23, 1997

      The Assembly State Government Committee reports favorably Assembly, No. 2285.

      This bill permits members of the Judicial Retirement System to borrow against their accumulated deductions in the retirement system. Any member who has at least three years of service in the retirement system may borrow up to, but not more than, 50% of the amount of the member's accumulated deductions. The amount borrowed, together with an interest rate of 4% per year on the unpaid balance of the loan, shall be repaid to the retirement system in equal installments deducted from the member's compensation or in a lump sum amount.

      In the case of a member who retires or a retiree who dies before the outstanding balance of the loan and interest has been recovered, the bill provides for the repayment of the loan from any retirement or survivorship benefit, as appropriate.

      Last session, a similar bill (S-692) was approved by the Pension and Health Benefits Review Commission with a recommendation that the bill be amended to "provide for repayment of a loan upon retirement or death" before the outstanding balance of the loan and interest has been recovered. The Senate State Management, Investment and Financial Institutions Committee amended that bill to address the commission's recommendation; that amendment is included in the present legislation.