JULY 10, 2023 – For soldiers enrolled in the Blended Retirement System, Continuation Pay is a one-time, mid-career financial incentive payable to soldiers between their eight and 12 year point of service in exchange for additional service.
According to Staff Sgt. Candace Galbraith, the military is modernizing its approach to solider care and increasing the flexibility in retirement benefits Soldiers can take with them once they leave service.
“This should be considered a positive thing to the general public,” said Galbraith, a career counselor with the Pennsylvania Army National Guard. “The government is financially investing into its soldiers’ futures. Soldiers who will eventually convert back into citizens, and ideally use those funds to better support themselves, their families, or their communities.”
The benefit, which for traditional National Guard soldiers is typically four times the active duty monthly basic pay, is payable in a lump sum or installments. Soldiers can choose to save that money, invest it or spend it on a vacation.
Soldiers should work with their chain of command or contact their unit career counselor to check to see if they are eligible and begin the application process.
Can you briefly summarize what the BRS continuation pay benefit is and why it exists?
Galbraith: The Blended Services Retirement is a hybrid retirement system that was introduced in 2018, which currently serving Soldiers had the opportunity to opt into and convert their legacy retirement into BRS and which any Soldier entering service after 1 January 2018 was automatically enrolled. The Retirement System is a “blending” of two major sources of retirement income: the existing annuity provision for those who retire after 20 or more years of service, plus the Thrift Savings Plan (TSP) with agency matching up to 5%.
BRS Continuation Pay is a one-time, midcareer incentive payment offered to eligible Soldiers between 8-12 service years who are enrolled under the Blended Retirement Services in exchange for additional service. Continuation Pay is in addition to any other career field-specific incentives or retention bonuses that a Soldier may be eligible for. It exists to supplement the potential payment gap of the Legacy Retirement System to the new Blended Retirement System and give Soldiers an opportunity to invest this money into their TSP to further build onto their retirement.
What should Soldiers know about this benefit?
Galbraith: One of the biggest differences between the Legacy Retirement System and the BRS is that Soldiers are building a retirement fund from the beginning of their career and can take their retirement earnings with them at any point once they leave service. They are no longer bound to a 20-year service commitment to build a retirement fund.
As a result, Continuation Pay is designed as a retention tool with a dual-purpose benefit. A solider must have at least four years left on their contract to be entitled to payment, which is paid directly to the soldier. The soldier then has the option to invest their incentive into their TSP to increase their retirement fund, save it or spend the money in any way that financially benefits them best. Additionally, soldiers should know that if they entered service before December 31, 2017, and did not opt into the program, they no longer have the choice to do so. They will need to perform 20 years for a traditional retirement under the “High 36-Pay Plan” and are not eligible for Continuation Pay.
For those who are enrolled in BRS:
- If you reach 20 years of service, you will still receive a base pay out of 2% of your time in service at your rank in which you retired in addition to the value of your TSP. If you leave service before reaching 20 years, you will be able to roll over your TSP contributions into a 401K.
- At a minimum you should be contributing 5% of your pay to the TSP account for the government to match your contributions, creating a combined contribution of 10%. Different TSP funds have different market yields, and it is important to speak with a financial consultant that understands Retirement Market Investments to achieve the best retirement possible. The Pennsylvania National Guard has seven Certified Financial Counselors available to assist soldiers in making financial decisions such as retirement investing and more. All services are completely free and geographically available throughout the state.
- You cannot receive your BRS Continuation Pay once you have passed your 12th year of service.
- The qualifying factor to receive BRS Continuation Pay is having 4 years left on your contract. If you are otherwise not in good standing currently, but have 4 years, you will be able to contract for BRS.
- The actual amount of the incentive is based on a Base Pay Multiplier, which is set by the U.S. Army each calendar year. Soldiers are eligible regardless of rank or AGR/Mil-Tech/M-day status. For Calendar Year 23, the rate for AGR Soldiers is 2.5x their monthly base pay, for Mil-Techs or M-day Soldiers, the rate is 4x their monthly base pay. This rate can change each calendar year in January.
Story by Maj. Travis Mueller
Joint Force Headquarters – Pennsylvania National Guard