Employer Enrollment Oversight
Employer Enrollment Oversight refers to a period of time when an eligible employee was improperly excluded from enrollment in NHRS. Generally, to purchase employer enrollment oversight service credit, a member must file a claim for the oversight service credit within three years after the end of the period for which the service credit is being requested. However, the employer may elect to waive this three-year time limitation, thereby permitting the member to purchase the service credit. The member is responsible for paying 50% of the cost of the service credit purchase and the employer is responsible for paying the remaining 50%. The member may make one lump sum payment or annual installment payments plus interest, over a period of two to six years.

Military Service
Military Service After Joining NHRS: If a member leaves NHRS-covered employment to enter directly into the United States Armed Forces and returns to NHRS-covered employment within one year following the termination of active military duty, a member may receive service credit for up to three years at no cost. If the member’s active duty military service exceeds three years, the member may purchase military service credit for years in excess of three.

Military Service Prior to Joining NHRS: Subject to certain conditions, members with at least 10 years of creditable service may purchase up to three years of military service for military duty served prior to becoming a member of NHRS.

Modifications
Employees in the employ of their employer as of the effective date of the employer’s election of NHRS participation may have the option of joining NHRS. These employees may also be eligible to purchase service credit for periods of prior employment with their employer under the following conditions:

• They joined NHRS within one year after the employer elected NHRS participation.


• They were employed full-time by the employer prior to the date the employer joined NHRS.


• If they were covered by a retirement plan sponsored by the employer during any period of prior employment, the other plan must satisfy NHRS criteria.

Non-Permanent Employment
Non-permanent, Probationary, Temporary, Unclassified, or Non-Classified
Members who were employed by an NHRS participating employer for at least six months in a non-permanent, temporary, unclassified, or non-classified position prior to being enrolled in NHRS may be eligible to purchase service credit for that period of employment.

Out-of-State
Members who were formerly members of a public employees’ retirement system of another state or the United States government may be eligible to purchase service credit for service earned under that retirement system, provided the service to be purchased does not include any period for which the member remains eligible for benefits from the other retirement system. Members may purchase either the entire length of service rendered in the other retirement system or a pro-rata portion of the service, based on the maximum dollar amount that the member is permitted to withdraw from the other system.

Group II (Firefighters and Police Officers): In order for an out-of-state or federal government service credit purchase to qualify as NHRS Group II service, the requirements of the laws of the applicable state or federal jurisdiction governing certification as a full-time firefighter or police officer must meet or exceed the NHRS requirements for membership as a firefighter or police officer. Otherwise, the purchased service will be credited as Group I (employees and teachers) service in NHRS.

Previously Withdrawn Service
Members who terminate their NHRS-covered employment, withdraw their accumulated contributions (member contributions plus credited interest) and later return to NHRS-covered employment, may be entitled to reinstate their prior service credit of six months or more. The purchase may occur anytime prior to retirement.

Workers’ Compensation
Members who are receiving Workers’ Compensation payments but who are not receiving any compensation from their employer may be eligible to receive up to one year of service credit at no cost. To receive this service credit, members must file with NHRS the following documents for each new unrelated injury:

• A Department of Labor Memo of Payment of Disability Compensation form


• A first report of injury, which may be obtained from the member’s employer

Cost for Service Credit Purchases
The cost for purchasing any type of service credit, except previously withdrawn service (see below), is based on the member’s base rate of pay and contribution rates, all as in effect at the time of purchase. The member contribution rates are set by statute. Currently employee and teacher members contribute 5.0% of their earnings; firefighter and police officer members contribute 9.3%. As required by statute, the employer contribution rates are established by the NHRS Board of Trustees based on actuarial valuations designed to maintain a reasonable funded ratio for benefits for each member classification (employees, teachers, firefighters, police officers). Employer contribution rates may change each biennium.

Cost Calculation for Service Other Than Previously Withdrawn Service Credit:
Member’s base rate of pay at time of purchase, multiplied by the sum of the member and employer contribution rates, multiplied by the amount of creditable service to be purchased.

Example – Employee member purchases five years of out-of-state service in September 2006 when base rate of pay is $30,000:
$30,000 x 11.81% (member contribution rate of 5.0% plus employer contribution rate of 6.81%) x 5 years = $17,715.00

Example – Police member purchases five years of out-of-state service in September 2006 when base rate of pay is $30,000:
$30,000 x 24.2% (member contribution rate of 9.3% plus employer contribution rate of 14.9%) x 5 years = $36,300.00

Cost Calculation for Previously Withdrawn Service:
The cost to purchase previously withdrawn service is equal to the total amount of funds previously withdrawn by the member adjusted for interest from the date of withdrawal to the date of purchase, based on NHRS interest rates in effect for each intervening year.

Payment of Service Credit Purchases
All service credit purchases must be made while the member is contributing to NHRS through NHRS-covered employment and prior to the member’s retirement, except for the purchase of Employer Enrollment Oversight service credit. Service is not credited until the cost is paid in full to NHRS. Cost calculations must be computed and approved by NHRS; members may not make a service credit purchase without an approved cost calculation provided by NHRS. Forms to request cost calculations may be accessed from the NHRS web site, or by contacting NHRS. Payment options for purchasing service credit include a payment made directly by the member with after-tax dollars and/or a trustee-to-trustee transfer from a section 403(b) tax-sheltered annuity and/or a section 457 governmental plan.

Service Credit Purchases - Eligibility for NHRS Benefits
The purchase of military service for time served in the military prior to the commencement of employment in an NHRS-covered position can not be applied toward eligibility for Service Retirement, Early Service Retirement,or the medical subsidy. NHRS law specifically states that purchases of out-of-state service and federal government service can not be applied toward eligibility for the medical subsidy, and NHRS law states that most service credit purchases made on or after August 11, 2003, can not be applied toward eligibility for the medical subsidy.

Service Credit Purchases - Included in Pension Calculation
Service credit purchases are included in the creditable service component of a pension calculation. Such purchases are not included in the average final compensation component (the average of a member’s three highest-paid years of membership service) of the pension calculation.