NHRS Retirement Options: 120 Days to Change a Survivorship Option

Updated October 2, 2026. Quick answer: New Hampshire Retirement System members must select one benefit payment option at retirement: the Maximum Retirement Allowance, Option 1, or a reduced Survivorship Option (Option 2 at up to 100%, Option 3 at 50%, the Option 4 pop-up versions, or a custom Option 4(C)). A Survivorship Option can be changed in writing only within 120 days after the original notice of retirement, apart from listed exceptions. A refund of contributions ends membership, and for a member with 10 or more years of service it waives the vested deferred benefit. A direct cash refund carries 20% federal withholding.

More on public pension systems, topic by topic: NHRS working after retirement, NHRS ordinary disability retirement and NHRS purchasing service credit.

What this page covers and what it does not

This page works from three documents published by the New Hampshire Retirement System (NHRS): its Benefit Payment Options page, its Service Credit page, and its refund packet (a Special Tax Notice on rollovers plus the refund application). It covers the decisions made on leaving or retiring: which payment option to elect, whether to take a refund or leave contributions in the system, and buying service credit.

The pages read do not give the benefit formula, retirement ages by tier, the vesting period, or the interest rate credited on contributions, so this page does not state them. Confirm anything consequential with NHRS before a form is signed. For the state tax side, see New Hampshire retirement taxes and does New Hampshire tax pensions.

The election at retirement: what each option pays a survivor

Every retiring member makes one election. “At retirement, members must select one of the following benefit payment options.” The statute words the election as a permission and reaches further than retirement day. RSA 100-A:13 I says: “Any active member; any member who has reached service retirement age as provided in RSA 100-A:5, I(a), or II(a), or RSA 100-A:19-b; any retiree within 120 days after the date of the original notice of retirement provided by the retirement system, not to include any future benefit adjustments that may be carried out by the retirement system relative to a beneficiary’s monthly annuity; or any retiree within 120 days after a decision by the board of trustees granting the retiree disability retirement benefits pursuant to RSA 100-A:6, may elect to receive, instead of the retirement allowance otherwise payable, a retirement allowance of equivalent actuarial value under one of the options named in paragraph III, or to redesignate any such option previously elected.” The options divide into two families. The first two leave a beneficiary only whatever is left of the member’s own contributions. The Survivorship Options pay a beneficiary a lifetime pension instead.

The table carries no dollar amounts because the pages read publish none. The size of every reduction is personal: “The amount of the reduction in the member’s retirement pension will depend on the option selected, the member’s age at the time of retirement, and the age of each primary beneficiary.” For the general trade, see single-life versus joint-and-survivor pension.

Maximum Retirement Allowance and Option 1

These two are the non-survivorship choices. NHRS describes what they have in common: “Under the following two options, which provide a larger monthly pension benefit, a retiree’s beneficiary(ies) are entitled only to the remainder, if any, of the retiree’s accumulated contributions at the time of death.” Neither promises a beneficiary a continuing monthly pension.

The Maximum Retirement Allowance is described this way: “The maximum pension payable to a retiree until death.” For a beneficiary, the Maximum works like this: “the designated beneficiary(ies) will receive a lump sum payment of the amount, if any, equal to the retiree’s accumulated contributions at the time of retirement minus all annuity payments received by the retiree”. The remainder shrinks with every monthly payment, and once the payments received equal the contributions, nothing is left.

A computed example from assumed figures, not NHRS figures: if accumulated contributions at retirement were $80,000 and the retiree had received $30,000 in annuity payments by the date of death, the formula above gives 80,000 minus 30,000, a computed $50,000 lump sum to the beneficiary. If the retiree had received $80,000 or more, the formula leaves nothing.

Option 1 pays out the same remainder but at a lower monthly amount. NHRS puts it this way: “A reduced pension payable to a retiree until death.” It then states the purpose: “With this option, the retiree is taking a reduced benefit for the sole purpose of stretching out the dispersal of their accumulated contributions.” The pages read do not state the size of the Option 1 reduction.

The statute words the two remainders differently. For Option 1, RSA 100-A:13 III says: “Option 1. A reduced retirement allowance payable during the retired member’s life, with the provision that at the member’s death a lump sum equal in amount to the difference between the accumulated contributions at the time of retirement and the sum of the member annuity payments made to the member during the member’s lifetime shall be paid to the beneficiaries or contingent beneficiaries, if any, nominated by written designation duly acknowledged and filed with the board of trustees if such beneficiaries or contingent beneficiaries survive the member, otherwise to the retired member’s estate.” For the Maximum Retirement Allowance, RSA 100-A:11 I says: “(d) Upon the death of a retired group I member after his retirement allowance payments have commenced, provided he has not elected an optional allowance that has become effective, any excess of the amount of his accumulated contributions at retirement over the sum of the retirement allowance payments received shall be paid in one sum to the person or persons nominated by the member, if living, otherwise to the member’s estate.”

The Survivorship Options

A Survivorship Option trades monthly income for a lifetime benefit to someone else. “At retirement, a member may select a reduced pension under a Survivorship Option to provide a lifetime pension to a beneficiary(ies).” “Under a Survivorship Option, a member may designate any one person as sole beneficiary.”

Option 2 is the full-protection election: “A reduced pension payable until the death of a retiree with up to 100% of the retiree’s reduced pension payable thereafter to the retiree’s primary beneficiary(ies) for life.” The words up to matter, because a cap applies to every survivor benefit, covered below. Option 3 is the half version: “A reduced pension payable until the death of a retiree with 50% of the retiree’s reduced pension payable thereafter to the retiree’s primary beneficiary(ies) for life.”

A computed example from an assumed reduced pension, not an NHRS figure: if the reduced monthly pension under a Survivorship Option were $2,400, the beneficiary’s share would be at most 100% of it, a computed $2,400 a month under Option 2, and 50% of it, a computed $1,200 a month under Option 3. The reduced pension itself would come from NHRS’s calculation for the member’s age and the beneficiary’s age, which the pages read do not give.

The pop-up versions address the case where a beneficiary dies first. NHRS says that “if the beneficiary predeceases the retiree, the retiree’s pension will increase” and that it rises “to the Maximum Retirement Allowance that the retiree would have received without the election of a Survivorship Option”. The pages read do not state how the pop-up versions are priced against Options 2 and 3.

Option 4(C) is the custom route: “A reduced pension payable until the death of the retiree, then a customized percentage (other than 50% or 100%) or a flat amount of the pension paid to the retiree’s designated beneficiary(ies).” “This option is subject to approval by the NHRS Board of Trustees.”

Naming beneficiaries and the limits on the benefit

The election also requires choices about people. “Members must specify a distribution percentage for each beneficiary on the retirement application.” “The total combined percentages must equal 100%.”

Estates and trusts are available only to some elections: “Members may designate an estate or a trust as a primary or contingent beneficiary only if they choose the Maximum Retirement Allowance or Option 1.” “Only a lump-sum payment may be made to an estate or trust.” The statute also sends a remainder to an estate after a Survivorship Option. RSA 100-A:11 says: “Upon the death of the survivor of a retired group I member and the beneficiary nominated by him under the terms of an option, if an option was elected and had become effective, any excess of the retired member’s accumulated contributions at retirement over the sum of the retirement allowance payments received by the retired member and such beneficiary shall be paid to the person nominated by the member, if living, otherwise to the estate of the last to survive of the member and such beneficiary.”

Two limits apply to survivor benefits. “The beneficiary(ies) cannot receive a pension of more than 100% of the member’s reduced retirement pension.” And on beneficiaries much younger than the member: “The Code may limit the pension payable to the non-spouse beneficiary(ies) who is more than ten years younger than the member.” NHRS adds that the exact percentage varies with the ages. A member naming a much younger non-spouse under a Survivorship Option should ask NHRS whether the Code limit applies before signing.

What can change after retirement, and what cannot

The Maximum and Option 1 are the flexible elections for beneficiaries: “Retirees may change their primary beneficiary designation under the Maximum Retirement Allowance or Option 1 at any time.” The statute is narrower for Option 1. RSA 100-A:11 says: “A designation, revocation or change of the person nominated under an optional election may be made only as provided in RSA 100-A:13.” RSA 100-A:13 I says: “After expiration of the 120-day grace period no change in option selection shall be permitted except as provided in paragraph II.” For the Maximum Retirement Allowance, RSA 100-A:11 says: “Nomination of a person to receive the return of the member’s contributions pursuant to this section shall be made by the member in writing filed with the board of trustees. A member may change his nomination by a similar writing.”

A Survivorship Option is much firmer. “Retirees who elect a Survivorship Option may change their option selection or primary beneficiary designation in writing within 120 days after the date of the original notice of retirement provided by the retirement system”. The statute adds a second starting point. RSA 100-A:13 I covers “any retiree within 120 days after a decision by the board of trustees granting the retiree disability retirement benefits pursuant to RSA 100-A:6”, and says: “When an election or change of option is made within 120 days after a decision by the board of trustees granting the retiree disability retirement benefits, the optional allowance shall be calculated using retiree and beneficiary age factors applicable as of the first day of the month following receipt by the board of the notice of election or change in option.” “Any changes submitted after the 120-day grace period will not be accepted, other than the following exceptions outlined in state law:” After the window, the exceptions are the only door.

The listed exceptions are narrow. On remarriage after a spouse beneficiary dies: “If a retiree’s spouse who is designated as a primary beneficiary dies and the retiree remarries; in this case, the retiree can select the new spouse as primary beneficiary and have the monthly benefit amount recalculated.” The statute’s trigger is wider, and the recalculation has a cost. RSA 100-A:13 II says a retired member may: “(2) Following the retiree’s subsequent remarriage, elect to nominate the current spouse as beneficiary under one of the options named in paragraph III, due to either the death of a former spouse, the termination of an elected option under subparagraph (1), or the termination of an elected option by a former spouse under subparagraph II(b).” It also says: “Any supplemental allowances, or COLAs, granted to the retiree before the effective date of the election shall terminate on such effective date, but the value of such COLA’s shall be included in the actuarial determination of the amount of the allowance payable under the elected option.” For a single non-spouse beneficiary: “If a retiree has a single designated beneficiary who is a living, non-spouse, the retiree may cancel the option.” “Upon cancellation the retiree will begin receiving the Maximum Retirement Allowance and cannot designate a Survivorship Option to another beneficiary.” Divorce has its own exceptions, which the Benefit Payment Options page sets out in full.

The beneficiary has a power too: “Designated beneficiaries can renounce the Survivorship Option at any time and the retiree’s benefit will pop up to the Maximum Retirement Allowance.” The statute limits the right to a single beneficiary. RSA 100-A:13 II says: “(b) Where a retired member has elected option 2, 3, or 4, and has designated a single beneficiary, the beneficiary may at any time voluntarily renounce his or her right to any future benefits by signing and filing with the board a form designated by the board.” The pages read do not say whether a member can change from one payment option to another after the 120 days when the election is the Maximum or Option 1. The statute states the general rule. RSA 100-A:13 I says: “After expiration of the 120-day grace period no change in option selection shall be permitted except as provided in paragraph II.” The first paragraph II exception is written for a different group. It says: “(a) Any retired member who has elected option 2, 3, or 4, and whose beneficiary nominated by the retiree under such option was the retiree’s spouse at the time of such election, may:” A member who elected the Maximum or Option 1 should ask NHRS before relying on any change.

Police and fire members: the automatic spousal allowance

Group II (Police and Fire) members have a separate death benefit. NHRS says that “the qualified surviving spouse of such retiree will be eligible for a lifetime pension, equal to 50% of the retiree’s pension”, and that “The Group II Automatic Spousal Allowance terminates when the surviving spouse dies or remarries.” The pages read here do not repeat the Group II lump sum death benefit bands, so a Group II member should read the full Benefit Payment Options page. The statute attaches conditions to that spousal allowance and ties the lump sums to dates. RSA 100-A:12 II says: “Upon the death of a group II member who has retired on or after April 1, 1987, or upon the death of a group II member who has filed an application for retirement benefits with the board of trustees after January 1, 1991, there shall be paid to the person nominated by the member by written designation filed with the board, if living, otherwise to the retired member’s estate, in addition to the amount payable under RSA 100-A:11 a lump sum of $3,600 if the member retired before July 1, 1988, and if the member is married on the date of such member’s retirement, there shall be paid to such surviving spouse an allowance to continue until the spouse’s death or remarriage equal to 50 percent of the member’s service, ordinary disability, accidental disability, or violent accidental disability retirement allowance payments.” It continues: “For any person who is a group II member as of June 30, 1988, and who retires on or after July 1, 1988, the lump sum payment shall be $10,000. For any person who becomes a member of group II on or after July 1, 1988, and on or prior to July 1, 1993, the lump sum payment shall be $3,600.”

Refund of contributions versus leaving them in the system

A member who leaves covered employment before retiring faces a different decision from a retiree. The refund application is explicit about the trade: “In consideration of the return of such amounts, I hereby waive for myself, my heirs and assigns, and my beneficiary or beneficiaries, all rights, title, and interest in any and all funds under the care and control of the NHRS Board of Trustees.”

Two consequences follow directly. First: “I understand that if I withdraw my accumulated contributions, my membership in the NHRS is fully terminated.” Second, for members with longer service: “If I have completed 10 or more years of creditable service and elect a return of my accumulated contributions upon termination of employment, I understand that I have waived my right to a Vested Deferred Retirement benefit.” A member with 10 or more years who is weighing a refund is therefore weighing the cash against a deferred pension, and pension refund versus leaving it lays out the general trade. The pages read do not state the vesting period or the amount of a deferred benefit, so a benefit estimate from NHRS comes first.

Timing matters too. “Employees and Teachers may not submit this application until 30 days after termination.” “This Application shall be void if re-employment in any NHRS category occurs during that 30-day period.” The statute states the waiting period for a Group I member and ties the payment to a three-month deadline. RSA 100-A:11 I says: “(a) If a group I member ceases to be an employee or teacher for reasons other than retirement or death and if he or she has not elected to receive a vested deferred retirement allowance under RSA 100-A:10, the amount of his or her accumulated contributions shall be paid within 3 months after his or her written request therefor, provided that the member may not file a written request for such payment until at least 30 days from the date the member ceases to be an employee or a teacher and provided that the member may not again become a group I member during said 30-day period.” The application must also be notarized and returned in the original, and the former employer completes a section for terminations after January 1, 2012.

Cash or rollover, and what the 20% withholding does

A refund is paid one of two ways. On a direct cash payment: “If I do not want the NHRS to make a trustee-to-trustee transfer, I may instead elect to have my accumulated contributions paid directly to me as a single sum payment in cash, after 20% mandatory Federal income tax withholding on the taxable portion of the distribution.” On the tax effect: “You will be taxed on a payment from NHRS if you do not roll it over.” “If you are under age 59½ and do not do a rollover, you will also have to pay a 10% additional income tax on early distributions”. The alternative: “If you do a direct rollover, NHRS will make the payment directly to your IRA or an employer plan.”

The 60-day route needs planning. “If you do not do a direct rollover, NHRS is required to withhold 20% of the payment for federal income taxes.” For anyone who wants to roll over the whole refund this way: “in order to roll over the entire payment in a 60-day rollover, you must use other funds to make up for the 20% withheld”. “Generally, you will have 60 days after you receive the payment to make the deposit.”

A computed example from an assumed $30,000 taxable refund paid directly, not an NHRS figure: 20% withholding is a computed $6,000, leaving a computed $24,000 paid in cash. To roll over the full $30,000 in a 60-day rollover, the member would need to deposit the withheld $6,000 from other funds. A direct rollover avoids that gap. The withholding is an advance on federal tax, not the final tax, which is settled on the return. “This Notice does not describe any State or local income tax rules (including withholding rules).” New Hampshire’s own treatment is covered on New Hampshire retirement taxes.

Getting back service you gave up, and buying more

Service credit drives the pension. NHRS calls it “is a key variable in determining a member’s New Hampshire Retirement System (NHRS) retirement benefit”. Withdrawn service can be reinstated, but at a cost: “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 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.” A refund taken for the cash can therefore be reversed only by repaying the money with interest, so a member who may return to covered work should price the repayment before taking the refund. The statute also prices a partial reinstatement. RSA 100-A:3 VI says: “The amount determined by the actuary to reinstate full or partial service credit shall be the amount of withdrawn contributions, but not less than 6 month’s contributions multiplied by the ratio of the service credit to be purchased to the full length of service relating to the withdrawn contributions, with this amount adjusted for interest from the date of withdrawal to the date of payment based on the interest rates in effect for each fiscal year.”

Other service can be purchased as well, including prior military service and several other types listed on the Service Credit page. For most types: “The cost for purchasing any type of service credit, except previously withdrawn, military service after joining NHRS, employer enrollment oversight, and workers’ compensation, is the full actuarial cost for this service determined by the actuary based on methods and assumptions recommended by the actuary and approved by the NHRS Board of Trustees.”

The ground rules: “Most service credit purchases must be made while the member is contributing to NHRS through NHRS-covered employment and prior to the member’s retirement.” “Service is not credited until the cost is paid in full to NHRS.” What a purchase buys is limited: “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 highest-paid years of membership service) of the pension calculation.” Eligibility is a separate matter, and NHRS says that most purchases made on or after August 11, 2003 cannot be applied toward Medical Subsidy eligibility.

Cost-of-living adjustments

The pages read for this page do not state how a cost-of-living adjustment (COLA) works. NHRS lists a separate COLAs page for retirees, and the amounts and eligibility rules should be taken from there. This page makes no claim about COLAs.

What the IRS adds on tax

A refund or lump sum from a public pension is a distribution, so the IRS rules apply on top of NHRS’s own. On withholding, the IRS says that a taxable eligible rollover distribution paid to you “is subject to mandatory income tax withholding (generally at a rate of 20%), even if you intend to roll it over later”, and that if you roll it over yourself “you’ll have to add funds from other sources equal to the amount withheld”. The NHRS Special Tax Notice in the refund packet describes both the direct rollover and the 60-day rollover and says NHRS withholds when no direct rollover is chosen. The rollover clock, if the money is paid to you: “you have 60 days from the date you receive it to roll it over to another eligible retirement plan”.

On early distributions the IRS says “the law imposes a 10% additional tax on certain early distributions from certain retirement plans”. Its list of exceptions includes “Distributions made to you after you separated from service with your employer after attainment of age 55” and “Distributions made to a qualified public safety employee from a governmental plan”. Whether an exception fits a particular refund depends on your own plan and facts, so confirm it with a tax preparer before you take one.

What this page could not settle

• The pages read do not state the size of the reduction for any payment option; it depends on the option, the member’s age and the beneficiary’s age.
• The pages read do not state the vesting period, the interest rate credited on contributions, or what a deferred vested pension would be.
• The pages read do not state whether a member who elected the Maximum Retirement Allowance or Option 1 can later switch to a Survivorship Option.
• The pages read do not state whether a spouse must consent to a refund or to a payment option without a survivor benefit. The statute requires an acknowledgment on the option form for a married member, not consent. RSA 100-A:13 I says: “The notice of non-election, election, or change of retirement option shall be on a form designated by the board, which, if the member or retiree is married, shall include a spousal acknowledgment.” The text of RSA 100-A:11 read for this page states no spousal condition on a refund.
• The pages read do not describe cost-of-living adjustments, so none are stated here.
• The pages read do not describe a lump sum retirement option or a deferred retirement option program; the only lump sums described are the refund of contributions and the remainder paid to a beneficiary.

New Hampshire NHRS topic pages

Each row links to the page that reads one topic in the New Hampshire NHRS member documents: the topic, then the summary that page carries.

Common mistakes

• Electing a Survivorship Option and assuming it can be reversed later; changes are accepted in writing only within 120 days after the original notice of retirement, apart from the listed exceptions.
• Choosing the Maximum Retirement Allowance and assuming a beneficiary will receive a monthly pension; the beneficiary receives only a lump sum remainder of contributions, if any.
• Taking a refund after 10 or more years of service without realizing it waives the right to a Vested Deferred Retirement benefit.
• Asking for a 60-day rollover of the full refund without other money to replace the 20% that NHRS must withhold.

Related on this site: New Hampshire retirement taxes, does New Hampshire tax pensions, single-life versus joint-and-survivor pension, pension refund versus leaving it and public pension retirement decisions by system.

Sources

• New Hampshire Retirement System, Post-Retirement Death Benefits: https://www.nhrs.org/members/benefits/post-retirement-death-benefits
• NHRS, Service Credit: https://www.nhrs.org/members/plan-details/service-credit
• NHRS, Refund Packet: https://www.nhrs.org/docs/default-source/members-forms/refund-packet.pdf?sfvrsn=dc7706b4_27
• IRS, Topic no. 413, Rollovers from retirement plans (irs.gov): https://www.irs.gov/taxtopics/tc413
• IRS, Topic no. 558, Additional tax on early distributions from retirement plans other than IRAs (irs.gov): https://www.irs.gov/taxtopics/tc558

Sources: the primary documents linked above, read on October 2, 2026. General information from each system’s own published materials, not legal, tax or financial advice. Your own member statement and the system’s current rules decide your benefit, and a pension counsellor at the system or a fee-only adviser is the right place to confirm anything consequential.