If you take a loan against your NYSLRS contributions, you must repay the loan in five years. This timeframe is required by the Internal Revenue Service. If the loan is not repaid within five years, it defaults.
NYSLRS loans are paid back through payroll deductions, which are taken out of your paycheck by your employer. During the five-year period, we’ll periodically review your remaining loan balance. If your current payroll deduction amount won’t be enough to pay off your loan within the required timeframe, we’ll notify your employer to increase your payroll deduction. We do this to make sure you can repay your loan on time.
Generally, the increase of your payroll deduction will be small. Your increase could be more significant if, for example, you go on leave without pay and need to make up any missed payments.
Once you pay your loan in full, we’ll notify your employer to stop taking payroll deductions.
How You Can Adjust Payroll Deductions
You can sign in to your Retirement Online account or call our automated phone line to check your outstanding loan balance. Knowing your outstanding loan balance can help you determine how to adjust your payroll deductions if you want to pay off your loan sooner. Please visit our website for more information about repaying your NYSLRS loan.