Taking a loan through ERS

embers of the New York State and Local Employees’ Retirement System (ERS) receive benefits beyond a lifetime pension. Did you know that most members can take out a loan against their retirement contributions? If you are an active member (on the payroll of a participating employer), have at least one year of service credit and have a certain minimum amount of contributions in your account, you can apply for a loan against those contributions.

Retirement Online is the fastest, most convenient way to apply for a loan through ERS. You can see how much you are eligible to borrow, what the repayment amount would be and whether your loan will be taxable. If you already have a loan, you can find your current balance and manage your loan payment in Retirement Online. To register (if you don’t already have an account) or to sign in, go to web.osc.state.ny.us/retire/sign-in.php.

Once you submit a loan application and we issue a check, you are responsible for repaying the loan. ERS members must repay loans through payroll deductions within five years. When you apply, you can choose the minimum payroll deduction, which would pay off your loan in five years, or you can pay more to pay off your loan sooner. You can increase your payroll deduction amount, make additional payments or pay your loan in full at any time with no prepayment penalties.

If you leave public employment, you must make loan payments directly to ERS. If you fail to do so, your loan will go into default. You will still need to repay the outstanding balance to ERS, and the loan will continue to accrue interest and insurance charges until it’s paid in full.

If you retire with an outstanding loan, your pension will be reduced. Retired ERS members may repay a loan, but you must pay the full balance in a single payment. Your monthly pension would increase going forward, but it would not be increased retroactively back to your date of retirement.

For more information, visit our loans page at osc.state.ny.us/retirement/members/loans-applying-and-repaying.