Penny Thomas
“Can I borrow money from my LAGERS account?” We get this question frequently. The short answer is no; you cannot borrow money from your LAGERS account. LAGERS is a defined benefit plan whose plan documents do not allow a member to borrow money from their account. There are some defined contribution plans that do allow borrowing, but again, we are a defined benefit plan, not a defined contribution plan like a 401K.
Your benefits, which are considered pre-funded, are not figured until your retire. When you retire, we use a formula (calculation) to figure out how much you will receive every month for the rest of your life. This formula is:
Your Benefit Program (benefit multiplier)
X
How Long You Work
X
How Much You Earn
Even if your employer is contributory, meaning you, as an employee, pay in 4% of your after-tax salary for you retirement plan, it is still not allowed. Your money received by LAGERS is put into a trust to pay for your future benefit. This trust will not allow for any in-service access to the money. It will be the first money paid to you in the form of a monthly benefit, a monthly benefit you will receive for life. However, if you leave employment with a LAGERS employer before your retirement age, you do have an option of receiving a refund of your contributions.
If you have further questions about this topic or any other regarding your LAGERS benefit, please contact us at [email protected].
