What is Average Final Compensation and Creditable Service?
A member’s Average Final Compensation (AFC) is the average of the member’s annual compensation for the three highest paid years of membership service. Certain limitations may apply.

Creditable service, also referred to as “service credit”, includes membership service earned as a contributing NHRS member, plus service credit purchases. Service credit purchases may include employer enrollment oversight service, military service for military duty served prior to NHRS membership, modifications service, nonqualified service, out-of-state service, probationary/temporary service and previously withdrawn service. There are also provisions relating to service credit for members called to active military duty and for members who receive Workers’ Compensation.

What does it mean to be vested?
Members who have at least 10 years of creditable service are vested and have earned their right to a pension. This means that they may leave their NHRS-covered employment before they are eligible to retire but are still entitled to a pension in the future, when the eligibility requirements for a Vested Deferred Retirement benefit have been met. Vested members must not withdraw their funds from NHRS if they wish to receive pension benefits.

Do all NHRS members need 10 years of service in order to retire?
No. All members who are age 60 or older and are actively contributing to NHRS are eligible for Service Retirement, regardless of how many years of creditable service they have. Different provisions apply to Disability Retirement.

Once I am vested, am I entitled to my employer’s share if I withdraw my funds?
No. Members never receive a refund of their employer’s contributions. An employer’s contributions are used to fund retirement pensions; employer contributions are never payable as a refund.

May I borrow or withdraw any of my NHRS funds if I am experiencing financial difficulties?
No. Members may not borrow or withdraw any of their NHRS funds for any reason prior to termination of employment or retirement.

If a member terminates employment, must the member’s accumulated contributions be withdrawn immediately?

No. A terminated member may leave their contributions with the NHRS indefinitely.  A member will be deemed inactive after 180 days of absence from service, and may request a return of contributions (unless the member is on a leave of absence).  Any contributions after 180 days of absence that are not returned will be credited with earnings at a lower interest rate.

A Group I member may request a return of contributions any time at least 30 days from the date the member ceases to be an employee.  A Group II member may request a return of contributions any time following cessation of employment, provided the member is not on a leave of absence.  A return of contributions would, however, result in a cancellation of service credit.  An inactive member is advised to consult with a legal or tax advisor before requesting a return of contributions. 

A terminated member who is vested may leave accumulated contributions with NHRS indefinitely and will continue to earn interest at the same rate as an active member and, upon satisfaction of eligibility requirements, may apply for a Vested Deferred Retirement benefit. In lieu of a monthly retirement benefit, a vested terminated member may elect a refund of accumulated contributions.

May I make additional contributions to NHRS beyond the required member contribution rate?
Members who applied for the additional contributions program prior to December 31, 2004, and whose applications were subsequently approved by NHRS, may contribute additional after-tax funds to NHRS. Members may not withdraw their additional contributions prior to terminating employment or retiring.

Does NHRS provide health insurance to retirees?
No. NHRS does not provide health insurance. Political subdivision employers (cities, towns, school districts and other units of government) must allow their retiring employees the option of continuing health insurance coverage under their employers’ plans when their employees retire. Employees who retire from state government must contact the New Hampshire Division of Personnel to determine their eligibility for health insurance after retirement.

After I retire, may I get another job somewhere else?
Yes. When members receive a Service, Early Service or Vested Deferred Retirement pension from NHRS, any compensation they earn from employment in a position that is not an NHRS-covered position will not affect their pension. If retired members return to work in an NHRS-covered position, their pension will stop until they retire again. Upon subsequent retirement, pension payments which were stopped as a result of returning to work in an NHRS-covered position are not recoverable.

Disability Retirement benefits are subject to gainful occupation offsets regardless of where the retired members work.