What's happening
This bill lowers the maximum loan amount new members of the NY State Teachers’ Retirement System can borrow against their contributions.
Why it matters
Reduces loan access for new teachers. By lowering the maximum loan amount from 75% to 50% of member contributions (or $50,000, whichever is less), new members will have less ability to borrow against their retirement savings, impacting their financial flexibility in emergencies or for large expenses.
Creates a stricter standard for new hires only. The changes apply exclusively to those joining the system on or after July 1, 2020, creating two classes of members—those with more generous borrowing terms and those with more restrictive ones, which may affect perceptions of fairness or recruitment.
Aligns with other public retirement systems. The amended limits mirror those already in place for other New York public retirement systems, suggesting a move toward standardized loan policies for public employees across the state.
Minimal financial impact on employers. According to the fiscal note, the change is not expected to increase costs for school districts or other employers, but it could encourage new members to preserve more of their retirement savings for actual retirement rather than using them as a source of short-term loans.
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Who cares
Teachers joining NYSTRS on or after July 1, 2020
The bill would cap their total outstanding retirement-system loans at the lesser of 50% of contributions plus interest or $50,000, rather than the current 75% limit.
New York State Teachers’ Retirement System
The system would administer the new borrowing limits while retaining the one-year service requirement, $1,000 minimum loan and limit of one loan per twelve-month period.
Employers of NYSTRS members
The bill’s fiscal note estimates no annual employer cost from the changes.
New York State and Local Employees’ Retirement System members
The bill would correct contribution and interest cross-references in the loan provision covering members who first joined on or after January 1, 2018.
Headline styles
Limit Teacher Loan Amounts
Plain English, a few words. Used as the page title.
Sponsors
3 Co-sponsors
History
- Referred to governmental employees
- Returned to assembly
- Died in senate
- Referred to rules
- Delivered to senate
- Passed assembly
- Ordered to third reading rules cal.159
- Rules report cal.159
- Reported
- Reported referred to rules
- Reported referred to ways and means
- Referred to governmental employees
Full text
3 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
7117
2019-2020 Regular Sessions
IN ASSEMBLY
April 9, 2019
Introduced by M. of A. ABBATE -- (at request of the New York State Teachers' Retirement System) -- read once and referred to the Committee 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 Assembly, 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 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 thousand dollars, whichever is less.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD09733-01-9
A. 7117 2
§ 2. Subdivision a of section 613-a 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 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 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 thousand 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 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] six hundred [seventeen] thirteen of this [chapter] article (including interest credited at the rate set forth in subdivision c of such section [five] six hundred [seventeen] thirteen compounded annually); or (ii) fifty thousand 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 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. 7117 3
taken by members of the New York State Teachers' Retirement System who
first join such system on or after July 1, 2020. 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. The current limit is seven-
ty-five percent of the total member contributions plus interest. Addi-
tionally, 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.
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 2019-3 dated October 5,
2018 prepared by the Actuary of the New York State Teachers' Retirement
System and is intended for use only during the 2019 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.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.