§ 517-b. Loans to members of a teachers' retirement system. a. 1. A
member of a teachers' retirement system in active service who has credit
for at least one year of member service may borrow, no more than once
during each twelve-month period, an amount not exceeding seventy-five
percent of the total contributions made pursuant to section five hundred
seventeen of this article (including interest credited at the rate set
forth in subdivision c of section five hundred seventeen compounded
annually) and not less than one thousand dollars.

2. A member of the New York state teachers' retirement system who
first joins such system on or after July first, two thousand twenty-two
in active service and who has credit for at least one year of member
service may borrow, no more than once during each twelve-month period,
an amount, not less than one thousand dollars and which would not cause
the balance owed pursuant to this section, including any amounts
borrowed then outstanding to exceed (i) fifty percent of the member's
total contributions made pursuant to section five hundred seventeen of
this article (including interest credited at the rate set forth in
subdivision c of this section compounded annually); or (ii) fifty
thousand dollars, whichever is less.

b. An amount so borrowed, together with interest on any unpaid balance
thereof, shall be repaid in equal installments which shall be made by
the borrower directly to the retirement board or through regular payroll
deduction. Such installments shall be in such amount as the retirement
board shall approve; however, they shall be at least (i) two percent of
the member's contract salary, and (ii) sufficient to repay the amount
borrowed, together with interest on unpaid balances thereof within a
period not in excess of five years. In the event of default such
retirement board shall be authorized to collect such payments due from
the employer of such member through payroll deduction and such member
shall forfeit all future entitlement to borrow from the retirement
system until the unpaid balance of the loan outstanding at the time of
default is fully paid. Such retirement board, at any time, may accept
payments on account of any loan in addition to the installments fixed
for repayment thereof. All payments of principal and interest, at the
lower of the rates set forth in either subdivision c of section five
hundred seventeen of this article or subdivision c of this section, made
by the member shall be credited to his or her account as principal or
interest. Any additional interest paid by the member shall be credited
to the appropriate fund of the retirement system.

c. The rate of interest payable upon loans made pursuant to this
section shall: (i) for members of the New York state teachers'
retirement system, be one percent less than regular interest pursuant to
paragraph (b) of subdivision nine of section five hundred one of the
education law, however in no event shall the rate be less than the rate
set forth in subdivision c of section five hundred seventeen of this
article; (ii) for members of the New York city teachers' retirement
system, be one percent less than the regular interest rate established
pursuant to paragraph (d) of subdivision twenty-two of section 13-501 of
the administrative code of the city of New York for such system, however
in no event shall the rate be less than the rate set forth in
subdivision c of section five hundred seventeen of this article.
Whenever there is a change in the interest rate it shall be applicable
to loans made or renegotiated after the date of such change in the
interest rate.

d. A service charge payable upon loans made pursuant to this section
shall be set by the retirement board in an amount sufficient to cover
the cost to the retirement system of administering the loans. Such
charge shall be paid to the retirement system when the loan is made or
in equal installments over the period the loan is outstanding. The
amount of the service charge shall be credited to the fund from which
administrative expenses are paid.

e. Each loan made pursuant to this section shall be insured against
the death of the member in an amount equal to the amount of the loan
outstanding at any given time; with the exception that until thirty days
have elapsed after the making thereof, no part of the loans shall be
insured. Such insurance shall be provided by the retirement board
through the retirement system. Upon the death of the member, the amount
of insurance so payable shall be credited to his or her account. The
premium payable by the member for such insurance shall be set by the
retirement board at a rate not to exceed one percent of the amount
loaned.

Such premium shall be prorated to July first next and shall be paid to
the retirement system in equal installments over the period of the loan.
Thereafter, a premium not to exceed one percent per annum of the present
value of the outstanding loan as of July first shall be paid in the same
manner each succeeding year until such loan is repaid or the member is
retired.

The retirement board shall, at least annually, review such premium
rate, and may, in its discretion, increase or reduce the premium, modify
the terms or conditions of coverage, or discontinue the insurance of
loans. In no event shall this subdivision impose any obligation upon
the retirement board to continue to insure loans of members upon the
terms and conditions herein provided or upon any other terms or
conditions.

f. Such a retirement board is authorized to establish special funds as
may be necessary to carry out the provisions of subdivisions d and e of
this section.

g. Whenever a member of such a retirement system, for whom a loan is
outstanding, becomes entitled to the return of his or her contributions
because of withdrawal from such system or because of death, the amount
of any loan outstanding on such date including accrued interest as
provided in subdivision c of this section shall be construed to already
have been returned to such member and the refund of contributions to
which he shall then be entitled shall be the net amount of such
contributions together with interest thereon pursuant to subdivision c
of section five hundred seventeen of this article.

h. Notwithstanding the provisions of section five hundred sixteen of
this article, whenever a member of such a retirement system, for whom a
loan is outstanding, retires, the retirement allowance payable without
optional modification shall be reduced by a life annuity which is
actuarially equivalent to the amount of the outstanding loan (all
outstanding loans shall continue to accrue interest charges until
retirement), such life annuity being calculated utilizing the interest
rate on thirty-year United States treasury bonds as of January first of
the calendar year of the effective date of retirement and the mortality
tables for options available under section five hundred fourteen of this
article. Notwithstanding the preceding sentence, in the case of the New
York state teachers' retirement system, commencing January first, two
thousand four, the interest rate on ten year United States treasury
obligations as of January first of the calendar year of the effective
date of retirement shall be used. Notwithstanding the preceding
sentence, in the case of the New York state teachers' retirement system,
commencing January first, two thousand sixteen, the average annual
interest rate on ten year United States treasury obligations for the
days during the calendar year that precedes the calendar year in which
the retirement becomes effective shall be used.

i. Such a retirement board is authorized to adopt such rules and
regulations as it finds to be necessary in administering the provisions
of this section. Anything in this section notwithstanding, the
retirement board of the New York state teachers' retirement system is
authorized to adopt rules and regulations permitting a loan at any time
prior to retirement to a member who is not in active service, provided
such loan would otherwise be permitted under this section and under
applicable provisions of the Internal Revenue Code relating to loans
from pension plans.

j. Such a retirement board shall discharge any evidence of a loan to
member pursuant to this subdivision upon the satisfaction of the
obligation of the member thereunder.

k. The retirement system shall have no right to bring suit in any
court against any member to enforce the amount due under this section
and the retirement 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 as provided in this section.