Form Cl-0822-0614 Certified Loan Request printable pdf download

CL-0822-0614

STATE OF NEW JERSEY — DEPARTMENT OF THE TREASURY

PO Box 295

DIVISION OF PENSIONS AND BENEFITS

Trenton, NJ 08625-0295

Fax (609) 292-3613

CERTIFIED LOAN REQUEST

All regular pension loan requests MUST be submitted using the Member Benefits Online System

(MBOS). Use this form only when a member cannot submit a pension loan request using MBOS because:

1.) The member has been on leave of absence without pay or transferred employers within

the last six months;

2.) The member is paid by State supplemental payroll; or

3.) The employer is late submitting the Quarterly Report of Contributions.

Do not submit this request for any other reason, as it will be returned. This request must be certified

by the employer. Additional instructions are provided in the following page.

For more information about submitting a loan request using MBOS

visit the Division of Pensions and Benefits Web site at:

LOAN PROVISIONS

Before submitting a Certified Loan Request, please be certain the member reads and understands these loan

provisions and the IRS Requirements (listed on the reverse side of the request form).

To be eligible to borrow, the member must be actively contributing to an eligible retirement system and

have at least three years of contributing membership POSTED to the account. (This usually occurs

three years and two months after enrollment.)

Members are permitted no more than two loans in a calendar year.

The loan balance cannot be more than one-half of the contributions posted to the member’s account.

Further, the IRS requires a new loan amount, when added to the highest balance due (without inter-

est) during the 12-month period for all loans from all employer-provided retirement plans, cannot

exceed $50,000.

Loans must be repaid within five years. Furthermore, members who have multiple outstanding

loans must repay the balance of all loans taken within a period not to exceed five years from

the issuance of the first loan. If a loan cannot be repaid within the five-year maximum when paid at

the maximum allowable loan deduction of 25 percent of the base salary, the loan may be denied or

the member may be issued a loan in a smaller amount than requested. Members with existing loan

balances who take a new loan may see the loan deduction increase if the loan cannot be repaid within

the five-year maximum when paid at the normal minimum deduction. (See the form instructions and

IRS Requirements for additional details.)

The interest rate is the prevailing rate set annually by the Treasurer, and is calculated on the

unpaid balance of the loan.

A nonrefundable administrative fee may also deducted from the

requested loan amount. For the current interest rate and any administrative fee go to:

/loans-home.shtml

If the member retires with an outstanding loan balance, the member will have the option to pay off the

outstanding loan balance in its entirety or to repay the loan through deductions from the monthly

retirement allowance until the balance of the loan together with interest is repaid. Payments will be

the monthly equivalent of the amount deducted from compensation immediately before retirement.

If the member dies before the outstanding loan balance with interest has been recovered, the remain-

ing balance will be repaid from the proceeds of any other benefit payable to the beneficiary(ies),

including group life insurance or monthly payments.

(Continued on last page)

Form Cl-0822-0614 Certified Loan Request

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