Earnable Compensation

Earnable Compensation is the compensation paid to a member that may be included in calculating Average Final Compensation (AFC).

The definition of Earnable Compensation varies depending on membership status as of July 1, 2011, and/or vested status as of January 1, 2012. Here is a summary of changes to the definition of Earnable Compensation pursuant to House Bill 2, Chapter 0224, Laws of 2011.
Y – Included as Earnable Compensation.     
N –  Not included as Earnable Compensation.

Effective On and After 1/1/12
Type of Compensation Prior to HB 2 Vested Prior to 1/1/12 Not Vested Prior to 1/1/12 
Full Base Rate of Compensation Paid Y Y Y
Overtime Pay Y Y Y
Holiday Pay Y Y Y
Vacation Pay Y Y Y
Sick Pay Y Y Y
Annual Longevity Pay Y Y Y
Cost of Living Bonus Y Y Y
Additional Pay for Extracurricular & Instructional Activities (Teacher and Employee members employed by a school district or SAU only) Y Y Y
Military Differential Pay - No Termination of Employment Y Y Y
Fair Market Value of Employer Furnished Meals & Living Quarters, if Subject to Federal Income Tax Y Y Y
Supplemental Pay by Employer while Member is Receiving Workers' Comp. Y Y Y
Teacher Development Pay Not Part of Contracted Salary Y Y Y
Military Differential Pay After Employment Termination to Enter United States Armed Forces Y Y Y
Extra or Special Duty Pay (Group II members only) Y Y* Y*
Severance Pay *** *** N
Cash Incentives Paid by Employer to Encourage Member to Retire Y Y N
Pay for Unused Vacation Time Y Y N
Pay for Unused Sick Time Y Y N
End of Career Additional Longevity Pay Y Y N
Fair Market Value of Other Non-cash Compensation, if Subject to Federal Income Tax N N N
Other Compensation & Fringe Benefits Subject to Federal Income Tax N N N
Settlement Agreements *** *** ***
Amounts paid more than 120 days after Termination of Employment *** *** N

* – Excluded if member's NHRS-eligible service commenced on or after 7/1/11. ***  – Contact NHRS

AFC is subject to limitations contained in RSA 100-A: 1, XVIII
NHRS has issued Interpretive Memoranda on a variety of subjects relating to the interpretation of RSA 100-A. Several of these memoranda relate to the definition of Earnable Compensation.