SENATE STATE MANAGEMENT, INVESTMENT AND FINANCIAL INSTITUTIONS COMMITTEE

STATEMENT TO

SENATE, No. 505

STATE OF NEW JERSEY

DATED: MARCH 14, 1996

      The Senate State Management, Investment and Financial Institutions Committee reports favorably Senate Bill No. 505.

      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.

      The bill provides for the repayment of the loan if a member or retiree retires or dies before the outstanding balance of the loan and interest has been recovered.

      Last session, a similar bill (S692) was approved by the Pension and Health Benefits Review Commission with the recommendation that the bill be amended to provide for the repayment of the loan if a member or retiree retires or dies before the outstanding balance of the loan and interest has been recovered. Such an amendment was made to the bill.