New Jersey § 18a:66-109

§ 18a:66-109.

Any member who has at least three years of service to his credit for which he has

contributed as a member may borrow from the retirement system an amount equal to not

more than 50% of the amount of his accumulated deductions, but not less than $50.00;

provided that the amount so borrowed, together with interest thereon, can be repaid

by additional deductions from compensation, not in excess of 25% of the member's compensation,

made at the same time compensation is paid to the member. The amount so borrowed, together with the interest at the rate of 4 % per annum on any unpaid balance thereof, shall be repaid to the retirement system

in equal installments by deduction from the compensation of the member at the time

the compensation is paid or in such lump sum amount sufficient to repay the balance

of the loan, but the rate at which any installment is deducted shall be at least equal

to the member's rate of contribution to the retirement system and at least sufficient

to repay the amount borrowed, with interest thereon. Not more than two loans may be granted to any member in any calendar year. Notwithstanding any other law affecting the salary or compensation of any person

or persons to whom this act applies or shall apply, the additional deductions required

to repay the loan shall be made. Loans shall be made to a member from his accumulated deductions. The interest earned on those loans shall be treated in the same manner as interest

earned from investments of the retirement system. In the event a member retires without having repaid the full amount borrowed, then

the retirement benefits to which he would otherwise be entitled shall be paid, less

a deduction for the loan repayment. Subject to the approval of the board upon application by the retiree, the deduction

from periodic benefits for a loan repayment may be reduced or otherwise adjusted,

provided however that this deduction shall equal the lesser of the amount paid prior

to the retirement or 20% of the periodic retirement benefit, whichever is less. In the case of a pensioner who dies before the outstanding balance of the loan and

interest thereon has been recovered, the remaining balance shall be repaid from the

proceeds of any other benefits payable on the account of the pensioner, either in

the form of monthly payments due to his beneficiaries or in the form of lump sum payments

payable for pension or group life insurance.