Members of the New York City Employee Retirement System, or NYSCERS, can take out loans against their accumulated contributions to the pension system. Members may borrow up to 75 percent of the value of their combined contributions and earnings. The terms of loans available differ according to membership tier.
According to NYCERS publication "Loans for Tier 1 and 2 Members #912," Tier 1 and Tier 2 members are eligible to take out as many as two loans in a 12 month period with no minimum loan amount. The NYSCERS publication "Loans for tier 3, 4 and tier 6 Basic and special Plan Members #911" states that members of Tiers 3, 4 and 6 can only take out one loan in a 12 month period and the loan must be for a minimum of $1,000. In addition, some Tier 6 members, known as Tier 6 22-Year Plan members, cannot borrow against their retirement accounts.
The loan repayment terms are also different for different tiers. Tier 1 and 2 members incur an interest rate of six percent on NYSCERS loans and can take as long as 38.4 years, or 999 pay periods, to repay their loans. These members must pay a minimum of five percent of gross salary per pay period to their outstanding loans. Tier 3, 4 and 6 members are required to pay loan insurance at 0.3 percent in addition to the six percent interest rate, and must repay their loans within five years, though they are only required to make payments of two percent of gross salary per pay period.