AEELA: what it is, loans, savings and who can join

What AEELA is and how long it has existed

The Asociación de Empleados del Estado Libre Asociado de Puerto Rico (AEELA) is a private nonprofit institution dedicated to promoting savings and offering financial services and benefits to public employees, government retirees and their families.

Its origin traces back to Act 52 of July 11, 1921, which created the Savings and Loan Fund of the Insular Government of Puerto Rico. That means it has been operating for over a century, making it one of the oldest financial institutions on the Island. Today it is governed by Act 9 of 2013, the AEELA Act, which has been amended several times since.

That 'private nonprofit' detail is not cosmetic: AEELA is not a government agency even though its members are public employees, and its money is not general fund money.

It is not a union and it is not your pension

These are the two recurring confusions, and both can cost you if you act on them.

AEELA is not a union. It does not negotiate collective agreements, does not represent you in a disciplinary case and does not intervene in your working conditions. If you were suspended or an administrative complaint was filed against you, AEELA is not who you call; that is your union or professional association.

AEELA is also not the government retirement system. They are completely different things, administered separately. Your AEELA savings account does not replace your pension, and the changes made to government retirement systems do not change your AEELA savings.

Put simply: the union fights for your contract and your case; AEELA manages your savings and benefits; the retirement system manages your pension. You can have all three at once, and many people in public service do. If someone is explaining two of them as if they were one, ask for it in writing.

What the statute says AEELA is, and the detail that settles the doubt

This does not have to be argued from hearsay: it is in **Article 3 of Act 9-2013**, which lists the Association's purposes. They are: **to stimulate savings** among employees and covered pensioner members; **to establish insurance plans, including death insurance**; **to make loans**; **to provide homes and hospital facilities** for members' and their families' medical treatment; and to promote by all means the individual and collective betterment of its members economically, morally and physically.

Read it in full and note what is **not** there: no pension, no years-of-service annuity, no collective bargaining. That list is the legal definition of what AEELA does.

And a detail in **Article 4** settles the confusion once and for all. Membership has **eight member categories**, and the eighth is, verbatim, that of **«System 2000 and Act 106-2017 participant members»**: any active employee or former employee contributing or having contributed to the **Plan 106** or **System 2000** Defined Contribution Plan who, upon definitively separating from service, remains at their own request as a depositor member. The statute itself says that category is **retroactive** to the approval of Act 106-2017 and Act 305-1999.

In other words: the law treats your Plan 106 and your AEELA account as **two separate things happening to the same person**. So separate that a member category had to be created so someone in Plan 106 could remain a depositor member upon leaving.

Who can become a member

The membership universe is broader than many assume. Any public employee of any governmental entity, municipality or public corporation qualifies (with a transitory, career, confidence or regular appointment) as do retirees belonging to any of the government's retirement systems.

Note two things in that list. First: it includes municipalities and public corporations, not just central government agencies. Second: it includes transitory and confidence appointments, which are precisely the ones excluded from bargaining units under Act 45. It is entirely possible to be ineligible for the union and eligible for AEELA.

The 3% savings and dividends

The heart of AEELA is the savings account. The minimum required contribution is 3% of gross monthly salary (or of the pension or monthly income, as applicable) and it is deducted systematically.

You can save more than 3%. Doing so has two effects: you receive more dividends and your borrowing margin increases, meaning how much you can borrow. That second part is what people discover late, usually once they already need the loan.

On dividends: they are paid annually and AEELA presents them as higher than other savings accounts. Exact figures change year to year and only AEELA can confirm them for the current year; do not go by a number you saw in a Facebook group.

The 3% is not optional (and these are the exceptions the statute lists)

Many people think being an AEELA member was a decision they made one day. For most public employees, it was not. **Article 11 of Act 9-2013** opens by saying that **the contribution to the Savings and Loan Fund shall continue to be mandatory for all employees of governmental entities** existing or later created, save for enumerated exceptions.

And it sets the mechanics: the directors or heads of governmental entities (and the directors of the retirement systems, for covered pensioner members who authorize it) **shall monthly deduct three percent (3%), or the percentage in effect when they joined the Association**, from the total salary or pension. The **Secretary of the Treasury** separates and remits that income to the Association, and that constitutes the Savings and Loan Fund.

That phrase «**or the percentage in effect when they joined**» explains why two coworkers have different percentages withheld and both are correct. If yours is not 3%, it is not a payroll error.

The exceptions the statute lists:

• **Teachers participating in the Teachers' Retirement System**, under that system's statute.
• **Government officials and employees performing their duties in the continental United States** or in any foreign country.
• **Employees appointed to serve in the Department of Education's school cafeterias**, under Act No. 328 of 1946.
• **Secretaries, agency heads, the Governor's aides, members of commissions and boards appointed by the Governor, legislators, the Comptroller, the Ombudsman, the Capitol Superintendent, the Director of the Office of Legislative Services and Mayors.** These notify the Executive Director of their intent not to join or to withdraw, and **may join or rejoin at any time** by written request.
• **Employees of public corporations** not subject to the mandatory deduction before June 24, 1965, those of corporations created later, and **municipal employees**: these **may join individually**, under the regulation adopted by the Assembly of Delegates.

Dividends, debts and the seven-year clock

**Article 17** explains where dividends come from and who gets them: the Association's **net benefits** (after administrative expenses, authorized reserves and whatever the Assembly of Delegates decides to use for members' benefit) **are credited annually as dividends to members contributing to the Fund**, **in proportion to their respective savings** at the close of the fiscal year. They are credited to your account and **paid to you together with your savings upon leaving employment for any reason**, or to your legal heirs upon death.

And if you leave before the fiscal year closes, you do not lose that portion: the statute entitles you to the **proportional crediting** of dividends based on your accumulated savings through your separation date. With a caveat in the same sentence: **if you owe the Association, that payment is credited to the debt**.

On debts, the statute is harsher than people assume. **Article 15** lets the Executive Committee **declare any obligation due before its maturity** if there are sufficient grounds to believe the borrower will resign or be removed, and in that case the amount **is deducted from salary**. **Article 16** provides that any credit, deposit or surplus in favor of a member who left their post owing money **shall be withheld by the Secretary of the Treasury and transferred to the Association**. And **Article 14** criminalizes «malicious resignation»: an employee who resigns **intending to defraud the Association** without settling their debts **commits the offense of ideological falsehood**.

One last fact almost nobody knows, and that reaches whole families: **Article 25** provides that money and other liquid assets held by the Association **unclaimed during the previous seven (7) years**, after public notice in a newspaper of general circulation, **pass into an Association social capital reserve** or its Risk Capital item. And the statute clarifies that this reserve **is not subject to the Abandoned or Unclaimed Money and Other Liquid Assets Act**. If your family had a public employee who died or retired years ago, that account is on a clock.

On the transparency side, **Article 18** requires the Association to **notify each member of an annual account statement**, by ordinary mail, electronically, or through the governmental entity where they work. If you have not seen yours in years, ask for it.

What else it offers

Beyond savings, AEELA operates as a full financial institution for its membership. These are the main lines:

• Personal loans and mortgage loans.
• Insurance, including life insurance.
• The AEELA MasterCard credit card.
• IRA accounts for individual retirement savings.
• Study scholarships for members and family.
• Discount programs on merchandise and services, and a prescription discount program.
• Sale of repossessed properties.
• Family activities and sporting events.

What to ask before, and what to ask if you leave

Two moments where you want the answers in writing, not by word of mouth.

Before joining: exactly how much is deducted from your gross salary, when it starts, how long until you qualify for loans, and what documents you need. If you are considering saving above the minimum, ask how that translates into borrowing margin before settling on a percentage.

If you leave public service: this is the question most people ask too late. What happens to your account, your accumulated dividends and any open loan when you leave government, and what options you have to keep or close the relationship. Do not guess and do not go by what happened to a coworker years ago: call AEELA, ask specifically for your situation, and get the answer in writing.