Quick answer
NHRS members who leave employment before retirement can roll their accumulated contribution refund into a Gold IRA
When you separate from NHRS-covered employment, you can request a refund of your accumulated member contributions plus credited interest and roll that lump sum directly into a self-directed Gold IRA. The monthly pension benefit cannot be redirected once payments begin. New Hampshire repealed its Interest and Dividends Tax effective January 1, 2025, so the rollover decision is now purely federal: a direct rollover avoids the 20 percent mandatory withholding and defers all taxes. Consult a tax advisor before acting.
Who this guide covers
The New Hampshire Retirement System (NHRS) is the defined benefit pension system for New Hampshire’s public workforce, governed by RSA 100-A. It divides members into two groups:
Group I: Employees and Teachers
State, county, and municipal employees, plus public school teachers. Roughly 90 percent of all NHRS members fall into Group I. Vesting: 10 years of creditable service or age 60, whichever comes first.
Group II: Police and Fire
Police officers and firefighters employed by a participating NHRS employer. Group II members receive higher average pension benefits than Group I and have access to death and disability coverage. Confirm your vesting requirements at nhrs.nh.gov.
Both groups are further divided into three tiers based on hire and vesting date: Tier 1 (hired and vested before January 1, 2012), Tier 2 (hired before July 1, 2011 but not vested before January 1, 2012), and Tier 3 (hired on or after July 1, 2011). Your tier affects the benefit formula and normal retirement age, but the rollover mechanics described in this guide work the same across all tiers. Colorado PERA uses comparable tiers; Colorado PERA Rollover to Gold IRA explains how those tiers interact with the refund and rollover decision.
This guide is for NHRS members separating from employment before retirement who want to understand whether their refund can fund a Gold IRA. It does not apply to members who have already begun collecting monthly pension payments. Once a pension annuity starts, those distributions are not eligible for IRA rollover under IRS rules.
What the NHRS refund actually includes
NHRS members who leave employment before retiring and request a refund receive their accumulated member contributions plus any credited interest earned on those contributions during their covered career. These are the amounts deducted from your paycheck throughout your NHRS employment.
The monthly pension is a separate matter. The refund at separation is a lump sum of what you contributed as a member. The ongoing defined benefit (the monthly pension you could collect at retirement age if you leave the contributions in the system) is a separate option. Only the lump-sum refund qualifies for IRA rollover under IRC Section 402(c).
Before requesting a refund, check your current vesting status through your NHRS member account. Vested Group I members with 10 or more years of creditable service have earned a right to a future monthly pension. Taking the contribution refund permanently forfeits that service credit. That trade-off is significant and worth careful analysis before you submit a withdrawal request to NHRS.
Refund vs. deferred pension: both columns
Vested NHRS members face a real decision: take the refund now and direct it to a self-directed account, or leave the contributions in NHRS and collect a monthly pension at retirement age. Neither path is automatically better. The table below shows both sides.
| Factor | Take refund, roll to Gold IRA | Leave in NHRS (deferred pension) |
|---|---|---|
| What you receive | Lump sum of member contributions plus credited interest | Monthly pension beginning at your normal retirement age |
| Service credit | Forfeited permanently upon refund | Preserved; pension calculated on years of creditable service |
| Investment control | Full control of assets; you choose custodian, metals, and distribution timing | NHRS manages assets and determines the benefit formula |
| Longevity risk | You bear it; IRA balance is finite | NHRS bears it; monthly payments continue for your lifetime |
| IRA contribution limits | Rollover does not count against annual IRA limits (IRC Section 402(c)) | Not applicable |
| Beneficiary access | IRA assets pass to named beneficiaries at death | Survivor benefits depend on the pension option elected at retirement |
| NH state tax on distributions | None (I&D Tax repealed January 1, 2025) | None (NH has no broad income tax) |
Non-vested members have a simpler picture: leaving without vesting means the employer-funded portion of the pension is not accessible. The only money available to roll is what you contributed from your paycheck. In that case, the refund captures your full member contribution balance and the rollover mechanics are straightforward.
A licensed financial advisor who knows your full retirement picture (expected NHRS pension formula under your tier, Social Security estimate, other savings, and longevity considerations) can help you weigh this choice. This guide explains the mechanics, not the personal decision. Iowa’s IPERS presents the same vested-versus-refund fork; the IPERS Rollover to Gold IRA covers how Iowa handles it.
New Hampshire state tax: a simple answer
New Hampshire has no broad individual income tax. Wages, salaries, and retirement distributions have never been taxed at the state level. The state previously imposed a 5 percent Interest and Dividends Tax on investment income, which would have applied to the credited interest portion of an NHRS contribution refund for residents holding the distribution rather than rolling it.
That tax no longer applies. Effective January 1, 2025, New Hampshire eliminated the Interest and Dividends Tax entirely, according to the Tax Foundation. For NHRS members who separate from employment in 2025 or later, neither the refund itself nor future distributions from a Gold IRA are subject to New Hampshire state income tax. The rollover decision is a purely federal calculation.
If you have a state income tax filing obligation in another state due to dual residency or recent relocation, that state’s rules may apply to your NHRS distribution. Confirm your filing situation with a tax advisor before acting. Recent arrivals from Hawaii may still carry ERS obligations; the Hawaii ERS to Gold IRA Rollover covers Hawaii’s rules.
Federal tax mechanics of the NHRS rollover
NHRS is a governmental defined benefit plan qualified under Internal Revenue Code Section 401(a). Distributions from governmental 401(a) plans are eligible rollover distributions under IRC Section 402(c), meaning they can transfer directly to a traditional IRA without triggering federal income tax or early withdrawal penalties at the time of the transfer. Two rollover paths exist.
Direct rollover (the clean path)
You instruct NHRS to transfer your refund directly to your Gold IRA custodian. The money moves trustee-to-trustee and never passes through your personal bank account. No federal withholding applies. No 60-day clock runs. All taxes are deferred until you take distributions from the IRA in retirement, when withdrawals are taxed as ordinary income under standard IRA rules.
Indirect rollover (the risky path)
If NHRS sends the refund as a check made out to you, federal law requires them to withhold 20 percent for federal income taxes. You then have 60 calendar days to deposit the full original refund amount (including the withheld 20 percent, which you must fund from other savings) into a qualifying IRA. Deposit only the check amount and the withheld 20 percent is treated as a taxable distribution for that year. The withheld amount is recovered as a credit when you file your federal return, but only if you completed the rollover correctly and made up the difference in time.
Example: $60,000 refund, indirect rollover. NHRS withholds $12,000 (20 percent) and sends you a check for $48,000. To complete a full rollover and avoid tax, you must deposit $60,000 into the Gold IRA within 60 days. That means coming up with $12,000 from other funds. Miss the deadline or deposit only $48,000, and the $12,000 shortfall is a taxable distribution for the year it was issued, potentially plus the 10 percent early withdrawal penalty if you are under age 59½.
The 10 percent early distribution penalty
Federal law adds a 10 percent additional tax on most retirement plan distributions taken before age 59½, under IRC Section 72(t). A direct rollover avoids it entirely because the distribution goes directly into another qualifying account. If you take cash and do not complete the indirect rollover within 60 days, the unpaid portion is subject to the penalty unless an exception applies. The IRS publishes the full exception list at IRS Retirement Topics: Tax on Early Distributions.
Consult your tax advisor for your specific situation.
Group II members: the age-50 rule matters if you take cash
Police officers and firefighters in NHRS Group II have access to a federal tax exception that Group I members do not. Under IRC Section 72(t)(2)(A)(v), qualified public safety employees who separate from service from a governmental plan on or after age 50 are exempt from the 10 percent early distribution penalty on distributions from that plan, even if they are under age 59½ at the time.
This exception matters primarily to Group II members who are considering taking the NHRS refund as a lump-sum cash distribution rather than rolling it into an IRA. A firefighter who separates at 52 and takes the refund as cash would not owe the 10 percent penalty on that distribution, provided the separation occurred at age 50 or later. Federal income tax on the taxable amount still applies.
Group II: the threshold is age 50, not 55. Private-sector employees who separate from their 401(k) plan at age 55 or older can avoid the early distribution penalty on that plan’s distributions. For public safety employees under governmental plans, the threshold is age 50, not 55. This distinction is confirmed in IRS Publication 575 (Pension and Annuity Income).
The age-50 exception does not change the income tax owed on a cash distribution, and it does not mean a cash distribution is a better outcome than a direct rollover. A direct rollover defers federal income tax entirely. The exception matters when a Group II member has decided to take cash and wants to know whether the penalty applies. For most members with meaningful balances, the long-term tax deferral from rolling into a Gold IRA produces a better after-tax result than cashing out, even without the penalty.
How to roll your NHRS refund into a Gold IRA: five steps
The process follows a clear sequence. Work through each step before moving to the next. Skipping the custodian setup before contacting NHRS is the single most common mistake that forces members into an indirect rollover and the 20 percent withholding problem.
- Open a self-directed Gold IRA with a qualified custodian A Gold IRA is a self-directed traditional IRA that holds physical precious metals rather than stocks or funds. Regular brokerage IRAs do not permit physical metal. You need a custodian approved to administer self-directed accounts with precious metals holdings, as required under IRC Section 408(m). Open the account, fund it with any initial contribution if required, and obtain your IRA account number before contacting NHRS.
- Request a direct rollover from NHRS Log in to your NHRS member account at my.nhrs.nh.gov or contact NHRS member services to begin the refund request process. On your withdrawal form, specify that you want a direct rollover to your IRA (not a refund paid to you). Provide your custodian’s name and account number. NHRS will send the funds directly to the custodian.
- Confirm the transfer with your custodian After NHRS processes the distribution, contact your custodian to confirm the funds have arrived and been credited to your IRA. Processing times vary. Do not assume the transfer is complete without written or electronic confirmation from your custodian.
- Select IRS-approved precious metals Work with your custodian or their affiliated dealer to choose metals that meet the IRS fineness requirements under IRC Section 408(m)(3). All purchases are made with IRA funds and title is held in the IRA’s name, not yours. Physical possession by you constitutes a distribution and triggers taxes and penalties.
- Verify depository storage The custodian arranges delivery of the metals to an IRS-approved depository in your IRA’s name. You will receive documentation confirming the metals are in your account. Home storage of IRA metals is not permitted under IRS rules.
IRS minimum fineness requirements for Gold IRA metals
The Internal Revenue Code sets minimum purity standards for precious metals held inside a self-directed IRA, under IRC Section 408(m)(3). Metals below these thresholds are not eligible IRA assets.
| Metal | Minimum fineness | Qualifying examples |
|---|---|---|
| Gold | 0.9950 (99.5%) | American Gold Buffalo, Canadian Gold Maple Leaf, Austrian Gold Philharmonic. The American Gold Eagle qualifies by statute despite 0.9167 fineness (IRC 408(m)(3)(A)(i)). |
| Silver | 0.9990 (99.9%) | American Silver Eagle, Canadian Silver Maple Leaf, Australian Silver Kookaburra |
| Platinum | 0.9995 (99.95%) | American Platinum Eagle, Canadian Platinum Maple Leaf |
| Palladium | 0.9995 (99.95%) | American Palladium Eagle, Canadian Palladium Maple Leaf |
Collectible coins, numismatic coins, and most pre-1933 gold coins do not qualify. Your custodian maintains a current list of approved products. Confirm IRS eligibility with the custodian before purchasing any specific coin or bar, as product availability and approval status can change.
Choosing a Gold IRA custodian for an NHRS rollover
A custodian administers your self-directed IRA account, coordinates the transfer with NHRS, arranges metal purchases through approved dealers, oversees storage at an approved depository, and generates the annual IRS forms (Form 5498 for the account balance, Form 1099-R for distributions) that document your account to the IRS.
NH public employees making a one-time rollover decision often find that a provider with an education-first process fits better than one that leads with product pitches. Understanding your options before committing to a custodian and a metal mix is worth the extra time, particularly when the amount involved represents years of public service contributions.
Augusta Precious Metals has served customers since 2012 and follows a process built around education: you review their materials, speak directly with a salaried educator (not a commissioned salesperson), and move forward only if the account structure makes sense for your situation. Augusta holds a Money Magazine Best Overall Gold IRA Company recognition for 2022-2026 and an A+ BBB rating with zero complaints. Their process suits members who want to understand what they are moving into before the rollover clears.
See Augusta’s full profile and request your free consultationCommon errors NHRS members make during the rollover
These mistakes appear repeatedly with governmental pension rollovers. Knowing them in advance prevents most problems.
Contacting NHRS before the Gold IRA is open
NHRS needs your custodian’s account details to process a direct rollover. If you request a refund before the IRA account exists, NHRS has no option but to send you a check, triggering the 20 percent withholding and the 60-day clock.
Assuming the refund includes employer contributions
The NHRS refund returns your own member contributions plus credited interest. Your employer’s contributions fund the defined benefit promise across the entire plan, not a portable balance assigned to your name. Do not project a refund amount larger than what your NHRS member account statement shows.
Missing the 60-day window on an indirect rollover
If you receive a check, 60 calendar days is the federal deadline. Bank processing, custodian onboarding, and paperwork delays all eat into that window. Missing it means the full distribution is taxable for the year received.
Storing the metals at home
Physical metals held outside an IRS-approved depository are treated as an IRA distribution at the moment you take possession. Home storage violates IRS rules regardless of how the metals were purchased. All IRA metals must stay in a recognized depository.
Related guides for New Hampshire public employees
Many NH public employees hold more than one retirement account alongside their NHRS pension. These guides cover rollover rules for each account type:
- Gold IRA for New Hampshire Residents: State-Specific Guide
- 403(b) to Gold IRA Rollover for Teachers (for NH teachers who hold a 403(b) through their school district alongside NHRS)
- 457(b) to Gold IRA Rollover for Government Employees (for state and municipal employees with an NHRS-parallel 457(b) deferred compensation plan)
Frequently asked questions: NHRS to Gold IRA rollover
Can I roll my NHRS pension into a Gold IRA?
Yes, with a key distinction. The contribution refund (your accumulated member contributions plus credited interest) is an eligible rollover distribution under IRC Section 402(c) and can transfer directly into a Gold IRA. The ongoing monthly pension benefit, once payments have started, cannot be redirected into any IRA. The rollover option applies only to the lump-sum refund at separation, not to a pension stream already in payment.
What happens to my service credit if I take the NHRS refund?
Taking a refund permanently forfeits your NHRS service credit. Vested members who take a refund give up the future monthly pension they had earned. Non-vested members forfeit only the employer contributions that funded the system promise on their behalf. Before requesting a refund, review your NHRS member account for your projected future pension amount under the deferred option and compare that against your current refund balance. The decision is permanent once the refund is processed.
Does New Hampshire tax my NHRS rollover or future Gold IRA withdrawals?
No. New Hampshire has no broad income tax on wages or retirement distributions. The state’s former Interest and Dividends Tax, which applied to investment income at a 5 percent rate, was repealed effective January 1, 2025 (Tax Foundation). For members who separate in 2025 or later, neither the NHRS refund nor future Gold IRA distributions face New Hampshire state income tax. The rollover analysis is a federal-only calculation.
What is the 20 percent withholding and how do I avoid it?
Federal law requires NHRS to withhold 20 percent for federal income taxes on any refund paid directly to you (an indirect rollover). This withholding is not optional; NHRS cannot waive it on distributions paid to the member. To avoid it, request a direct rollover: NHRS transfers your refund directly to your Gold IRA custodian, no withholding applies, and no 60-day clock runs. The withholding only applies when the money passes through your hands first.
I am a Group II police or fire member. Does the age-50 exception apply to me?
Yes, if you separated from your NHRS-covered public safety position on or after age 50. Under IRC Section 72(t)(2)(A)(v), qualified public safety employees who separate from a governmental plan at age 50 or later are exempt from the 10 percent early distribution penalty on that plan’s distributions, even if they are under age 59½. The exception applies to cash distributions. A direct rollover avoids the penalty regardless of age, so the exception is most relevant when a Group II member has decided to take cash instead of rolling over.
Can I roll only part of my NHRS refund into a Gold IRA?
Yes. Partial rollovers are permitted. You can specify that a portion of the refund goes directly to your Gold IRA and receive the remainder as a cash distribution. The cash portion is subject to 20 percent mandatory withholding and is taxable for the year received. The rolled portion is not. If you are under age 59½ and not a qualifying Group II member who separated at age 50 or older, the 10 percent early distribution penalty applies to the taxable cash portion.
Does the rollover count against my annual IRA contribution limit?
No. Rollovers from eligible employer plans like NHRS to a traditional IRA are excluded from the annual IRA contribution limit under IRC Section 402(c). The 2025 IRA contribution limit is $7,000 per year ($8,000 if you are age 50 or older), but a rollover from NHRS does not count against that cap. You can roll your full NHRS refund balance in a single transaction regardless of its size.
How long does NHRS take to process a refund?
Processing times vary. Contact NHRS member services at nhrs.nh.gov before submitting your withdrawal request to ask about current timelines. Open your Gold IRA account and have your custodian’s account details ready before you initiate the refund request. If NHRS has your custodian’s information at the time of processing, the direct rollover can proceed without the distribution passing through you first. Waiting until after the refund is already in motion to set up the IRA is how members end up receiving a check with withholding applied.
Sources
- New Hampshire RSA 100-A: New Hampshire Retirement System governing statute. Available at gencourt.state.nh.us.
- New Hampshire Retirement System member information, nhrs.nh.gov.
- IRS Retirement Topics: Tax on Early Distributions (IRC Section 72(t), including qualified public safety employee exception at 72(t)(2)(A)(v)).
- IRS Publication 575: Pension and Annuity Income (IRC Section 402(c) eligible rollover distributions; age-50 exception for public safety employees).
- IRS Publication 590-A: Contributions to Individual Retirement Arrangements (rollover rules and contribution limits).
- Tax Foundation: New Hampshire tax profile. Interest and Dividends Tax repealed effective January 1, 2025. Available at taxfoundation.org.
- IRS Retirement Topics: IRA Contribution Limits (2025 limits: $7,000 / $8,000 catch-up).
- IRS: IRC Section 408(m)(3) (precious metals fineness requirements for IRA-held assets).