62-5 SPD:62/5 SPD.qxd - NYCERS

SUMMARY PLAN DESCRIPTION - 62/5 TIER 4 MEMBERS VERSION APRIL 20122. Original TermsYou have an outstanding loan that has not yet been paid in full. If your new loan is approved,the amount of the new loan will be added to the existing balance; however, the consolidatedamount will be paid within the original repayment schedule (not to exceed 5 years from the dateof your original loan).Example: Your original loan repayment schedule is 5 years. Your outstanding loan currentlyamounts to $1,650.00 with 27 remaining payments of $63.82. You now want to borrow an additional$10,000.00. If you choose to repay both loans under ”Original Terms,” your new repaymentschedule will be $448.65 per payment for the same remaining balance of payments (27).3. New LoanYou have an outstanding loan that has not yet been paid in full. If you repay the outstanding loanbalance you will be eligible to apply for a new loan with a new repayment schedule of 5 years.Example: Your outstanding loan currently amounts to $1,650.00 with 27 remaining paymentsof $63.82. You now want to apply for a new loan of $10,000.00. If you repay your outstandingloan ($1,650.00), your new loan amount will be $10,000.00 and the repayment schedule willbe $91.92 per payment for 130 payments (5 years from the date of your new loan).TAXES AT RETIREMENTIRS regulations require NYCERS to treat pension loans as a retirement distribution if they aretaken at, or near, the time of retirement. In addition, an outstanding loan balance at retirementwill trigger Federal income tax liability if the amount you received is considered taxable money.However, you may roll over the taxable portion to a Traditional IRA, Roth IRA or Employer Plan.In the event you choose not to roll over the taxable amount, NYCERS is required to deduct 20%Federal withholding tax before issuing the check (or disbursing via EFT). If you have not yetreached the age of 55, and you choose not to roll over the taxable distribution, you will also besubject to an additional IRS 10% early distribution penalty tax when you file your taxes for thatcalendar year.If you elect to roll over the eligible distribution, it is your responsibility to make sure that theinstitution you name will be able to receive this direct rollover from NYCERS.The taxable portion of any outstanding loan balance is also available for rollover at retirement.However, you must accomplish this rollover on your own because the distribution was previouslygiven to you. You will receive a post-retirement rollover letter approximately 30 days after youhave retired explaining the exact amount that is eligible for rollover. You will have 60 days fromthe date of that letter to roll over the taxable portion to your Traditional IRA, Roth IRA or EmployerPlan.LOANSWWW.NYCERS.ORG25