seminars SHBP home page treasury home page about the division contacts treasury search treasury home page forms and publications EPBAM - employer administration manual pensions and benefits home page pensions and benefits home page contact us privacy notice legal statement nj home
top navigation graphic nj home my new jersey people business government departments
Pensions and Benefits Graphic
spacer

PENSION LOAN UPDATE
LOAN INTEREST, PROCESSING FEE, REPAYMENT AMOUNTS, AND ONLINE APPLICATION
(Last updated December 3, 2007)

For general information about loan eligibility, estimates, repayment requirements,
or to print a Loan Application see the Division's Loan Home Page


LOAN INTEREST RATE AND ADMINISTRATIVE PROCESSING FEE
Printable Loan Rate and Fee information flier
(PDF size 29K - requires Adobe Acrobat Reader.)

Chapter 92, P.L. 2007, required changes to the loan interest rate and the introduction of an administrative processing fee for pension loans taken by members of State-administered retirement systems that include loan privileges. (Public Employees’ Retirement System, Teachers’ Pension and Annuity Fund, Police and Firemen’s Retirement System, State Police Retirement System, and Judicial Retirement System).

  • Effective January 1, 2008 the interest rate on pension loans will be 4.69% calculated annually on the declining balance of the loan.

  • The loan interest rate is fixed annually, so if you borrow in 2008 you will have the same interest rate for the life of your loan unless you borrow again after the 2008 calendar year has ended. Every time a member borrows against their available loan balance, the entire outstanding balance is re-certified for the current year's interest rate.

  • For pension loans taken in 2008, the administrative fee will be $8.00.

  • The administrative Processing fee is not an added charge.  Fees are taken from the requested amount of the loan. For example, if you submit a loan request in 2008 for $1,000, the Division will subtract the $8.00 administrative fee from the $1,000 loan and you will receive a check for the balance of $992.  When submitting a loan application, always request an amount sufficient to account for the needed loan plus the current administrative fee.

Interest Rate and Fee Effective Dates

  • The interest rate and administrative fee are subject to change.  Interest and fees are set annually with any changes taking effect on January 1st each year.

  • Loan Applications received by the Division of Pensions and Benefits on or before midnight December 31, 2007 will be eligible for the current annual interest rate of 4% with no administrative processing fee.  Early submission of Loan Applications is strongly encouraged for members who wish to take a pension loan prior to the rate and fee changes.

    For the most timely submission and fastest processing of loan requests, use the Online Loan Application available on the Member Benefits Online System (MBOS).  MBOS loan requests are dated when you complete and submit the online application. An MBOS loan request received on or before 11:59 p.m. December 31, 2007 will be eligible for the 2007 interest rate. More information about MBOS and the online Loan Application is available at: www.state.nj.us/treasury/pensions.

    Mailed Loan Applications must be received in the Division’s mailroom no later than the close of business December 31, 2007.  Postmark dates will have no bearing on the loan interest/fee cutoff — be sure to allow sufficient time for post office delivery.

    Hand-delivered Loan Applications must be at the Division of Pension and Benefits, Office of Client Services by the close of business December 31, 2007. Call before visiting as office hours are subject to change due to inclement weather or other circumstances.

    You must meet all other eligibility criteria for taking a pension loan.  If you have already taken two loans in 2007 you will not be eligible to borrow and the loan request will be processed for the first available loan of 2008 regardless of the receipt date of the application.
  • Loan Applications received by the Division of Pensions and Benefits on or after January 1, 2008 will be processed for the new annual interest rate of 4.69% and charged the $8.00 administrative fee. This includes:

    — Online Loan Applications
    received through MBOS at 12:00 a.m. January 1, 2008 or after.


    Mailed or hand-delivered Loan Applications received by the Division of Pension and Benefits after the close of business December 31, 2007 — postmark dates have no bearing on the loan interest/fee cutoff for mailed Loan Applications.

Printable Loan Rate and Fee information flier (PDF size 29K - requires Adobe Acrobat Reader.)

LOAN REPAYMENT AMOUNTS

The minimum repayment amount on a pension loan is based on the member’s pension contribution rate.

The increase in the PERS and TPAF contribution rates to 5.5% under Chapter 103, P.L. 2007, will require higher minimum repayment amounts for pension loans certified after an employee’s pension contribution rate changes.

  • The change was effective July 2007 for State employees (except Judicial Branch); employees of an independent State authority, board, commission, corporation, agency, or organization; employees of a board or commission under the authority of the Commissioner of Education or the State Board of Education; employees of a State public institution of higher education (except employees of the University of Medicine and Dentistry of New Jersey - UMDNJ); and teachers and other employees of a local school district, regional school district, county vocational school district, county special services school district, jointure commission, educational services commission, State-operated school district, charter school, or county college.

  • The change will become effective July 2008 for employees of the Judicial Branch of State government;employees of the University of Medicine and Dentistry of New Jersey (UMDNJ); and employees of Counties, Municipalities, and other local employers not included in the list above.

SUBMIT A LOAN APPLICATION ONLINE

The increased number of pension loan requests has lead to significant delays in the processing of mailed loan applications. Processing time for a mailed loan application is currently a minimum of 2 weeks from the time the application is received by the Division of Pensions and Benefits.

To assure timely submission and faster processing of loan requests, employees should use the online Loan Application available on the Member Benefits Online System (MBOS).  Find out more about MBOS and the online Loan Application.


Visit the Division's Loan Home Page for more information about pension loans,
loan eligibility, estimates, repayment requirements, or to print a Loan Application.

spacer
bottom navigation graphic


pensions and benefits: home | employer manual | forms and publications | shbp home | seminars | pensions and benefits search

treasury: home | services | people | businesses | divisions | forms | online | treasury search

statewide: njhome | my new jersey | people | business | government | departments | search


Copyright State of New Jersey, 1996-2007
Division of Pensions and Benefits
PO Box 295
Trenton, NJ 08625-0295

All technical issues regarding this Web site should be sent to the Division of Pensions and Benefits Webmaster. Please do not submit pension or health benefits inquiries to the Webmaster.

Last Updated: Decembar 3, 2007