New Hampshire Code of Administrative Rules
Ret - Board of Trustees of the N.H. Retirement System
Chapter Ret 300 - PARTICIPATION IN THE RETIREMENT SYSTEM
Part Ret 310 - CALCULATION OF COMPENSATION FOR DETERMINATION OF BENEFITS
Section Ret 310.04 - Calculation of Average Final Compensation - With Substantiated Grandfathered Amount

(a) If the earnable compensation cap described in Ret 310.01(a) applies and a member has a substantiated grandfathered amount, the member's average final compensation for benefit purposes shall be calculated as set forth in this section.

(b) The NHRS shall determine the amount of the member's earnable compensation for the final 12 months of creditable service ending with his termination of employment, including amounts paid after separation from service such as:

(c) If a member has 2 or more periods of creditable service which are recognized for benefit calculation purposes and which are separated by a break in employment, then, when determining average final compensation, such periods of service shall be aggregated as if no such break had occurred.

(d) For members who have attained vested status prior to January 1, 2012, the NHRS shall, based on monthly salary data originally provided by the member's employing unit, determine the amount of the member's earnable compensation for each prior 12 consecutive month period, back to the member's date of hire with that employing unit, the first such period being that which begins 24 months before and ends 13 months prior to the member's termination of employment. For members who have not attained vested status prior to January 1, 2012, the NHRS shall, based on monthly salary data originally provided by the member's employing unit, determine the amount of the member's earnable compensation for each prior 12 consecutive month period, back to the member's date of hire with that employing unit, the first such period being that which begins 48 months before and ends 13 months prior to the member's termination of employment. For periods prior to 1975, for which monthly salary records are not available, it shall be assumed that earnable compensation paid in each period beginning on July 1 and ending on the following June 30 was earned ratably based on the service credited in accordance with Ret 307.01. If the member has 2 or more periods of creditable service which are recognized for benefit calculation purposes, such service shall be aggregated as provided under paragraphs (b) and (c) above.

(e) For members who have attained vested status prior to January 1, 2012, the NHRS shall identify the 3 highest earnable compensation amounts determined under (b), (c) and (d) above. For members who have not attained vested status prior to January 1, 2012, the NHRS shall identify the 5 highest earnable compensation amounts determined under (b), (c), and (d) above.

(f) For members who have attained vested status prior to January 1, 2012, if the amount determined by the NHRS under (b) and (c) above is not among the 3 highest amounts from above, the NHRS shall calculate the average final compensation for benefit purposes by dividing by 3 the sum of the 3 highest amounts from (d) above, and steps (h) - (k) below shall not apply.

(g) For members who have not attained vested status prior to January 1, 2012, if the amount determined by the NHRS under (b) and (c) above is not among the 5 highest amounts from above, the NHRS shall calculate the average final compensation for benefit purposes by dividing by 5 the sum of the 5 highest amounts from (d) above, and steps (h) - (k) below shall not apply.

(h) For members who have attained vested status prior to January 1, 2012, if the amount determined by the NHRS under (b) and (c) above is among the 3 highest amounts from (e) above, the NHRS shall multiply the higher of the highest earnable compensation in any 12 month period or the earnable compensation in the first such period as determined in (d). For members who have not attained vested status prior to 1/1/2012, if the amount determined by the NHRS under (b) and (c) above is among the 5 highest amounts from (e) above, the NHRS shall multiply the higher of the highest earnable compensation in any 12 month period or the earnable compensation in the first such period as determined in (d).

(i) For members who have attained vested status prior to January 1, 2012, if the amount from (h) above is equal to or greater than the amount from (b) and (c) above reduced by the grandfathered amount, the NHRS shall calculate the average final compensation for benefit purposes by dividing by 3 the sum of the amount from (b) and (c) above plus the 2 highest amounts from (d) above, and step (k) below shall not apply.

(j) For members who have not attained vested status prior to January 1, 2012, if the amount from (h) above is equal to or greater than the amount from (b) and (c) above reduced by the grandfathered amount, the NHRS shall calculate the average final compensation for benefit purposes by dividing by 5 the sum of the amount from (b) and (c) above plus the 4 highest amounts from (d) above, and step (k) below shall not apply.

(k) For members who have attained vested status prior to January 1, 2012, if the amount from (h) above is less than the amount from (b) and (c) above reduced by the grandfathered amount, the NHRS shall calculate the average final compensation for benefit purposes by dividing by 3 the sum of the amount from (h) above plus the grandfathered amount plus the 2 highest amounts from (d) above. For members who have not attained vested status prior to January 1, 2012, if the amount from (h) above is less than the amount from (b) and (c) above reduced by the grandfathered amount, the NHRS shall calculate the average final compensation for benefit purposes by dividing by 5 the sum of the amount from (h) above plus the grandfathered amount plus the 4 highest amounts from (d) above.

(l) If a member's earnable compensation for his final 12 months of creditable service is one of the high years used to determine average final compensation, and such earnable compensation is limited for benefit calculation purposes because of the earnable compensation cap, the retiring member shall be so notified as soon as administratively practicable following the final calculation of his or her benefit.

(m) If subsequent to June 30, 1991 and prior to termination of employment, a retiring member has been paid for any accrued holiday, vacation, or sick time or other credits, it shall be assumed for benefit calculation purposes, regardless of the member's employing unit's internal personnel policy, that such amounts paid pertain first to accrued holiday, vacation or sick time or other credits earned on account of service rendered after June 30, 1991.