Continuation Pay – Planning For The AY25 Change
Did you know – if you are in the Blended Retirement System (BRS), you’re eligible for a mid-career bonus that might be worth 2.5x to 13x your monthly base pay?! This is called continuation pay, and it’s one of the key factors that distinguishes Blended Retirement from the Legacy system. The Blended Retirement System has been functional for the better part of 7 years, but there is still limited awareness about continuation pay, eligibility, and how to request it.
The Army is giving its continuation pay program an overhaul in calendar year (CY) 25. The changes will change both when active Army members can request continuation pay and the amount of continuation pay for which they are eligible. If you are enrolled in BRS, on active duty, and currently have less than 12 years of service, it is important to understand these changes and know your options. There are currently no changes proposed to the Reserve component program, so this article will cover active component changes only.
What is Continuation Pay?
Continuation pay, or CP, is a one-time bonus paid to a mid-career service member enrolled in the Blended Retirement System. Continuation pay has two primary purposes. First, it serves to bolster the Blended Retirement package by providing a bonus that the service member can invest, pay down debt, or otherwise improve his or her financial outlook. Second, it’s a retention tool for the DoD. Taking continuation pay requires an additional service obligation (ADSO), which typically takes the service member “over the hump” where he or she will remain in the force through the 20-year mark.
The DoD provides guidelines, but each service component must implement and manage its own continuation pay program within those established left and right limits. There are also different guidelines for active component and reserve component Soldiers. Active component service members are eligible for a CP bonus of at least 2.5x monthly base pay, and up to 13x monthly base pay. This bonus may be offered anywhere between 8 and 12 years of service and requires a minimum of a 3-year ADSO.
Since 2018, the Army’s active component continuation pay program operated with the following features:
- 2.5x multiplier (meaning the CP amount was 2.5x one month’s base pay)
- Eligibility window of no less than 8 years and no more than 12 years*
- ADSO of 4 years
However, in 2025, this will change drastically – and it is important that you are tracking these changes, as part of the pool potentially eligible for CP and also as leaders of those eligible for CP.
What’s Changing?
The first and most important thing that’s changing is that the window of eligibility is shrinking. Historically, it has been set at the maximum threshold: a 4-year window between year 8 and year 12. In 2025, this will shrink down to a 1-year window during year 8 only.
This is a notable change, as many service members choose to wait until the 11-12 year mark to take CP. Waiting until later in that eligibility window was more beneficial, since most received promotions and passed the 10-year mark– which meant increased pay based on rank and time in service. In 2024, a Captain with 8 years of service would receive $18,725 in CP, but a Major with 10 years of service would receive $21,700. Overall, there was an incentive to “wait it out” and take CP later.
Unfortunately, there is a “bill payer” in this equation. Service members who are currently in the 8-12 year window (generally, those who entered the service between 2013 and 2016) will NOT be grandfathered in when the CY25 Implementation Guidance is published. Those who are currently between 8-11 years (generally, those who entered between 2014-2016) may not be able to “max out” their base pay in the manner that previous cohorts were. If those service members do not take CP before 1JAN25**, they may miss out on this opportunity completely.
Second, the multipliers are changing – and potentially increasing significantly for many service members. Currently, everyone receives the same multiplier of 2.5x one month’s base pay. The updated program will include multipliers of 2.5x, 5x, 7.5x, and 11x based on fill rates in each specific MOS or career field. For enlisted service members, the multiplier will be based on NCO fill rates within their specific MOS. For officers, the multiplier will be based on MAJ fill rates within their career management field (CMF). For warrant officers, the multiplier will be based on the CW3 fill rate in their career management field (CMF).
While there’s no “inside baseball” on what this may look like, it’s safe to assume these rates will vary significantly across different MOSs and career fields. Thanks to the ARSTRUC changes, we know some MOSs and CMFs are growing. These fields will likely have lower fill rates, and subsequently higher multipliers, for the next several years as the force is re-balanced. Other career fields may see lower multipliers. It is an individual responsibility to read the CY25 guidance when it is published to determine your CP multiplier. Leaders should also have an understanding of the bonuses their subordinates are eligible for and should take the time to engage them about the program.
What Should I Do?
Taking continuation pay is a personal decision. However, it is important for service members to understand what options are available. For those who are currently between 8 and 12 years of service, it is especially important because they may lose continuation pay eligibility on 01JAN25 (or when the CY25 guidance is published). Note that the current continuation pay guidance is labeled CY24/25. The CY25 portion is only intended to gap any time between 01JAN25 and the publication of the updated CY25 guidance that will shrink the eligible window and update multipliers. Since 01JAN25 is the earliest effective date, it is the most prudent planning factor.
The flow chart below is intended to help service members determine their continuation pay eligibility leading into CY25. This is not intended to serve as an authoritative document or to replace individual financial or career advice. It is highly recommended to discuss continuation pay and the ADSO it incurs with your spouse, partner, or other potentially impacted family members, and to leverage financial planning resources like your installation’s Financial Readiness Program to discuss how to best leverage this bonus.
If you want to request continuation pay, fill out the Request for Continuation Pay form. You will need to sign the form, and then send it to your company commander for signature. You can opt to receive the continuation pay in a lump sum or spread it out via monthly payments over 2, 3, or 4 years. Once the form has all applicable signatures, you need to submit it to your S1 or installation finance office for further processing. Anecdotally, most service members get this payment within 2 weeks of requesting it.
Unfortunately, the continuation pay is still a new, and it is not widely understood by more senior leaders. Only a small pool of mid-to-late careerists who opted into Blended Retirement have navigated it. Most battalion- and brigade-level command teams likely do not have personal experience navigating the Blended Retirement System and continuation pay program.
The Army is doing a better job spreading the word, but it’s the personal interactions and grassroots-level education effort that are helping to ensure eligible Soldiers don’t miss out. If you’re a junior leader, make sure you are talking to your teammates and subordinates about continuation pay, and that your unit retention team has the right information. After all – knowing is half the battle!
Author’s notes:
* Initial CY18 guidance set the window to request CP at 11-12 years of service; it then shifted to 10-12 years, before settling at an 8-12 year window in subsequent calendar years
** The CY25 guidance may be published and become effective as early as 1JAN25. Historically, the guidance comes out and becomes effective sometime between February and April, but service members should prepare for its earliest possible implementation date.
Maj. Erin Williams is an ORSA serving with the 101st Airbrone, a dual-military officer, and the mother of three young children. She spent a decade as an engineer officer, serving in the 20th Engineer Brigade, 82nd Airborne Division, the 101st Airborne Division, and the USMA Department of Systems Engineering before transitioning to the operations research/systems analysis (FA49/ORSA) functional area. She holds a master’s degree in data science from Harvard University, as well as degrees from Missouri University of Science and Technology and the United States Military Academy.
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