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Trustees approve limited retiree loan program with $15 million portfolio and 8% interest
Summary
The board approved a one-year limited retiree loan program recommended by the investment committee, setting loan size, term and interest-rate parameters and allocating $15 million to the program.
The Board of Trustees of the Government Employees Retirement System on Feb. 27 approved a one-year limited retiree loan program recommended by the investment committee, establishing loan-size limits, a five-year maximum term and an annual interest rate of 8 percent.
The investment committee recommended program parameters including a maximum loan amount of $7,500, a minimum of $2,500, a maximum term of five years, an interest rate of 8% per annum and a program portfolio totaling $15,000,000 with an internal breakdown of $7,500,000 per district. The board authorized the program for a one-year term.
Trustees discussed and then voted to adopt the investment committee’s recommendation. The motion passed on a roll-call vote recorded during the meeting; the board moved immediately to the next agenda item after the vote.
The action creates a limited loan product that will be funded from the retirement system’s portfolio and administered under terms the board approved for the one-year authorization. The motion did not specify additional implementation steps in the public discussion recorded in the meeting minutes.
The program was presented to the board as an investment-committee initiative; trustees did not amend the parameters on the floor during the recorded discussion. Formal implementation details such as application procedures, underwriting standards and servicing arrangements were not specified in the public portion of the meeting and will require staff follow-up.
