N.Y. Comp. Codes R. & Regs. tit. 21 § 5004.10

Current through Register Vol. 46, No. 51, December 18, 2024

Section 5004.10 - Loan default

(a) A loan shall be considered to be in default when a payment has not been made by the due date for such payment or within three months following such date.

(b) In the event of default, the system shall be authorized to collect such payment due from the employer of such member through payroll deduction and such member shall forfeit all future entitlement to borrow from the system until the unpaid balance of the loan outstanding at the time of default is fully paid.

(c) In the event of default by a Tier I or II member:

(1) if the member is not employed as a teacher under article 11 of the Education Law at the time of default, the loan shall be closed to the annuity savings account;

(2) if the member has claimed bankruptcy, the loan shall be closed to the annuity savings account;

(3) any loan which has been declared in default and closed to the annuity savings account of the member may not be repaid as a loan. Should such a member desire to repay his defaulted loan, he must do so by making a special arrangement with the system to make an additional contribution to his annuity savings account.

(d) In the event of default by a Tier III, IV or V member:

(1) the loan shall continue to accrue interest charges until repayment in full, death, withdrawal or retirement;

(2) the system shall have no right to bring suit in any court against any member to enforce the amount due and the system's sole remedy upon death, retirement or withdrawal shall be to offset the amount outstanding including interest from the member's account or other benefits payable to or on behalf of the member;

(3) repayment of a defaulted loan must be made by bank or certified check or money order.

N.Y. Comp. Codes R. & Regs. Tit. 21 § 5004.10