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S3353
SENATE, No. 3353
STATE OF NEW JERSEY
222nd LEGISLATURE
�
INTRODUCED FEBRUARY 5, 2026
Sponsored by:
Senator� SHIRLEY K. TURNER
District 15 (Hunterdon and Mercer)
SYNOPSIS
���� Establishes loan program in DCRP.
CURRENT VERSION OF TEXT
���� As introduced.
��
An Act
establishing a loan program in the Defined Contribution
Retirement Program and amending P.L.2007, c.92.
����
Be It
Enacted
by the Senate and General Assembly of
the State of New Jersey:
���� 1.� Section 3 of P.L.2007,
c.92 (C.43:15C-3) is amended to read as follows:
���� 3. a. The employer shall
reduce the compensation of each participant in the Defined Contribution
Retirement Program and pay over to the plan provider for the benefit of the
participant an employee contribution for the retirement benefit contract or
contracts equal to 5.5% of the participant's base salary. At the option and
request of a participant, the employer shall reduce the compensation of the
participant for additional contributions as permitted by the federal Internal
Revenue Code. The intervals for reductions and payments shall be determined by
the Division of Pensions and Benefits.
���� All participant contributions
shall be made in accordance with section 414(h) of the federal Internal Revenue
Code (26 U.S.C. s.414(h)).
���� b.��� The employer shall make
payment of the employer contributions to the program at a rate equal to 3% of
the employee's base salary, which moneys shall be paid to the designated
provider for the benefit of each participant. Additionally, employers shall pay
their share of the administrative costs of the program. The intervals for all
payments and the allocation of administrative costs shall be determined by the
Division of Pensions and Benefits including due dates and penalties for
noncompliance.
���� c.���� No employer
contributions shall be vested in a participant until after the participant
commences the second year of employment unless the participant, at the time of
initial employment, either (1) participates in a program substantially similar
to the retirement program, or (2) is a member of another State-administered
pension fund or retirement system.
����
d.� The Defined
Contribution Retirement Program Board shall establish a loan program within the
Defined Contribution Retirement Plan to permit participants to take loans from
the retirement plan in a manner that is not a withdrawal or a distribution under
program rules.�
����
Loans shall be made to a
participant from the participant�s mandatory, voluntary, or rollover
contribution subaccounts established for the benefit of the participant based
on the value of the subaccounts at the time of the loan.� Interest on the loan
shall be credited to the participant�s mandatory contribution subaccount
consistent with the interest rates established by the board.
����
The board shall establish
the criteria for loan eligibility, loan amounts, loan intervals, interest
rates, and repayment schedules, and shall establish such other requirements as
may be necessary in accordance with the program�s status as a qualified
governmental plan.� This subsection shall be implemented in a manner that
maintains the program�s status as a qualified governmental defined contribution
plan pursuant to sections 401(a) and 414(d) of the federal Internal Revenue
Code of 1986 (26 U.S.C. ss.401(a) and 414(d)), as amended, or such other
provision of the federal Internal Revenue Code, as applicable, regulations of
the U.S. Treasury Department, and other guidance of the federal Internal
Revenue Service.
(cf: P.L.2007, c.103, s.6)
���� 2. This act shall take effect
immediately.
STATEMENT
���� This bill requires the Defined
Contribution Retirement Program Board to create a loan program in the Defined
Contribution Retirement Plan to permit participants to take loans from the plan
in a manner that is not a withdrawal or distribution under program rules.� The
board will establish the criteria for loan eligibility, loan amounts, loan
intervals, interest rates, and repayment schedules, and such other requirements
as may be necessary in accordance with the program�s status as a qualified
governmental plan.� The bill states that loans can only be made to a
participant from the balance of the participant�s mandatory, voluntary, and
rollover contribution subaccounts established for the benefit of the individual
participant.� Under the bill, interest on the loan will be credited to the
participant�s mandatory contribution subaccount consistent with the interest
rates established by the board.