Tier 2 and 3 (Article 11) Members
If you retire with an outstanding loan, the annuity portion of your retirement benefit will be permanently reduced. You cannot pay off your loan once you retire. The amount of your annuity reduction will be based on your age, your loan balance at retirement and the type of retirement (service or disability). The loan application and Retirement Online provide examples of how much your reduction would be.
Tier 5 and 6 Members
If you retire with an outstanding loan, your retirement benefit will be permanently reduced. You cannot pay off your loan once you retire. The amount of your pension reduction will be based on your age, your loan balance at retirement, and the type of retirement (service or disability).
Benefit Reduction Examples
Here are examples of how your service retirement benefit would be permanently reduced by an outstanding loan balance at retirement. The approximate reductions are for calendar year 2021. The amount of the reduction changes annually.
| Age at Retirement | Outstanding Loan Balance | Annual Pension Reduction |
|---|---|---|
| 45 | $5,000 | $172 |
| $10,000 | $344 | |
| 55 | $5,000 | $208 |
| $10,000 | $417 | |
| 65 | $5,000 | $273 |
| $10,000 | $546 |