GERS Loan Program Could Open to Gov't Employees in October; Senators Call for Interest Rate Cap

By October 2024, members of the Government Employees Retirement System may be able to access personal loans up to $10,000 from the GERS, representing almost a decade of legislative effort to reinstate the popular program.

In 2016, Senator Kenneth Gittens sponsored what ultimately became Act 7880, requiring GERS to revive the suspended loan program. Eight years later and threats of legal action against GERS, the pension system's board voted to resume the popular program with an initial capital allocation of $20 million.

On Tuesday, Senator Milton Potter presented the Senate Committee on Budget, Appropriations and Finance with Bill 35-0196, which seeks to establish a September 30th 2024 deadline for the “resumption of the GERS loan program,” remove the 8 percent interest rate cap on personal loans and “limit the System's liability to $75,000.”

As the bill’s sponsor explained, “removing the mandatory 8 percent interest rate on the member loan program allows the GERS, like virtually every other institution offering loans, the flexibility to establish interest rates based on real-time data.” He also noted that “the $75,000 liability cap that the bill proposes simply puts the system in line with all other semi-autonomous and autonomous government instrumentalities.”