Average Final Compensation

Average Final Compensation (AFC) is the average of the member’s highest-paid years of membership service.

For members vested prior to January 1, 2012, AFC is based on a member's highest three years of Earnable Compensation.

For members not vested prior to January 1, 2012, or hired on or after July 1, 2011, AFC is based on a member's highest five years of Earnable Compensation.

Frequently asked questions about vesting for benefits.

Earnings Limitation

For benefit calculation purposes, a member’s final 12 months of Earnable Compensation is limited. (Earnable Compensation refers to a member’s gross earnings paid to the member by an NHRS participating employer plus a member’s earnings from a salary continuance or disability plan funded by an NHRS participating employer.) The limit is 150% of the member’s Earnable Compensation for the preceding 12 months or the higher Earnable Compensation for any year used in calculating the member’s AFC, excluding the member’s final 12 months. If the member exceeds the 150% limit and it is determined that the member is not eligible for grandfathered credits, NHRS will notify the member. Any questions regarding the limit may be addressed by contacting NHRS.

“120 Day Law”

Members must receive all compensation that is subject to NHRS contributions no later than 120 days after their termination of employment from their NHRS-covered position. Any compensation paid to members beyond the 120-day period will not be included in their benefit calculation. (There may be an exception in unusual circumstances, when it is established that the delay in payment was through no fault of the member.)