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Pensions and Benefits

2015 Interest Rate and Fee | Application Instructions | Loan Eligibility
Repayment Information | IRS 5-Year Rule and Multiple Loans

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Loan Applications Received During Calendar Year 2015

Interest is charged on a loan at a commercially reasonable rate set annually by the New Jersey State Treasurer.

  • For eligible borrowers, the interest rate for loan applications received in 2015 is 5.25% per annum on the declining balance of the loan.

An administrative processing fee also applies to all pension loans.

  • The administrative processing fee is $8.00 per loan.

The interest rate for 2015 is determined using the Prime Rate as of December 1, 2014 plus two percent. The administrative processing fee is set annually and is based on the actual costs associated with administering the pension loan program.

The loan interest rate is fixed annually, so if you borrow in 2015 you will have the same interest rate for the life of your loan unless you borrow again after the 2015 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.

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For complete information about pension loans see Fact Sheet #81, Pension Loans Adobe PDF (33K)



PERS, TPAF, PFRS, or SPRS members must submit loan requests using the Loan Application programs of the Member Benefits Online System (MBOS) or the Automated Information System at (609) 292-7524.

When using MBOS or the Automated Information System you can determine your eligibility to borrow, the maximum amount you may borrow, and calculate various repayment options.  Upon application you will receive confirmation that your Loan Application is received along with the date your loan check will be mailed.

Now with Interactive Voice Response Technology - available 24 hours-a-day! 7 days-a-week!

  • Call the Automated Information System at (609) 292-7524 from your touch-tone phone. Please have your Pension Membership Number or Social Security number available when you call.

  • Find out more about the Automated Information System! Adobe PDF (30K)

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Internal Revenue Service regulations require that all loans taken after January 1, 2004, have a maximum repayment schedule of five years.

If you have an outstanding pension loan balance and plan take another loan, you must repay the combined balance of the original loan and all subsequent loans within five years of the issuance date of the FIRST LOAN.  Find out more about multiple loans.

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For complete information about pension loans see Fact Sheet #81, Pension Loans Adobe PDF (33K)



You Must Have at Least Three Years of Service Credit and Contributions Posted to Your Pension Account. Pension credit is “posted” to your account on a quarterly basis. It normally takes 45 days after the end of a quarter for your membership credit to be posted to your account.

You Must Be an Actively Contributing Member. Only members who are actively working and making pension contributions may take a loan. If you have recently returned to work after a leave of absence without pay or have changed employers within the last six months, your employer must certify the bottom portion of the loan application that you have returned to employment.


The minimum amount you may borrow is $50. Loans then increase in multiples of $10. You may borrow up to one-half of your posted pension contributions to a maximum of $50,000, when added to the highest balance due (without interest) during the prior twelve month period for all loans from employer provided retirement plans other than PERS, TPAF, SPRS, and JRS. This includes retirement plans that an employee may have an interest in due to his or her employment relationship with New Jersey and/or any other governmental plans sponsored or administered by a public sector employer in New Jersey. Amounts received in excess of the maximum permitted by the IRS shall be declared a deemed distribution and subject to additional tax. You must indicate if you have any additional loans when taking a loan.


You may borrow twice in any calendar year. This is determined by the date of the loan check, not the date of the request. For example, if you make a request for a loan on December 28, 2012 and the check is dated January 2, 2013, the loan is considered your first for the year 2013.

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For complete information about pension loans see Fact Sheet #81, Pension Loans Adobe PDF (33K)



The minimum deduction toward repayment of any new loan is equal to the normal pension contribution rate of your salary at the time you apply for the loan. In most instances, your minimum loan repayment amount will be the same whether you borrow $500 or $5,000; however, the repayment of a larger loan will continue for a longer period of time than for a smaller loan.

Note: Chapter 78, P.L. 2011, the Pension and Health Benefit Reform Law, increased the pension contribution rates for retirement system members — find out more here.

The maximum deduction toward the repayment of your loan is 25% of your base salary.


IRS regulations require that all loans taken after January 1, 2004, have a maximum repayment schedule of five years.


Members who take multiple loans must repay the outstanding balance of the original loan and all subsequent loans taken before the original loan is completely paid off within five years of the issuance of the first loan.

If you have an outstanding loan balance and wish to take another loan before your current balance is paid off, you may still apply for a loan using any of the available methods, but the repayment amount may be substantially higher, to ensure full repayment of the total loan balance within five years of the issuance of the original loan. Furthermore, the new loan amount may be reduced, or the loan request may be rejected, if the payroll deductions required to repay the loan within this five-year period would exceed the 25% of pay restriction in State law.

For more information see the poster,
Have You Taken a Pension Loan Since January 1, 2004
Adobe PDF (50K)


If you are not satisfied with the loan amount or the repayment schedule when you receive your check, you may cancel the loan by returning the original unmarked and uncashed loan check

Note: By cashing the loan check you are agreeing to the loan amount and the terms and conditions of the repayment schedule.

When a loan check is returned, the funds are deposited back into your pension account and any remaining loan balance will be recertified using the current interest rate. The returned funds may again become available to borrow after the next quarter is posted.


IRS regulations require members to make timely payments toward outstanding loan balances. If you take a leave of absence without pay for more than three months, you will be notified of non-payment toward the balance of your outstanding loan and offered the choice of making a lump-sum payment for the balance and interest; or repayment of the loan through monthly installments through personal billing.

The number of loan payments and the amount of interest is dependent upon continuous repayment. If you are off payroll for any reason and your loan deductions are not remitted as scheduled, your loan balance will accrue additional interest. It is important that you notify the Division of Pensions and Benefits immediately upon your return to payroll so your loan plus additional accrued interest can be recertified. Failure to notify the Division in a timely manner will cause additional interest to accrue.


Failure to repay a loan as scheduled may result in the unpaid loan balance being declared a taxable distribution. If the loan is determined to be in default, the loan will be considered a distribution from your pension account and reported to the IRS. For the tax year in which the default occurs, the Division of Pensions and Benefits will send you a Form 1099-R for tax filing purposes in January of the following year.

For Additional Loan Regulations and Information see Fact Sheet #81, Pension Loans Adobe PDF (33K)

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