Blended Retirement System Continuation Pay Details

The Air Force released PDSM 17-88 (dtd 30 November 2018) giving more information on the Calendar Year (CY) 2018 Blended Retirement System (BRS) Continuation Pay.  The continuation pay is a critical piece of the BRS and a key component for members struggling with the choice of opting in to the BRS or staying with the current 50% at 20 annuity.  Continuation pay is for active component and reserve component on active guard reserve Title 10 orders who:

• Are covered under the BRS (they will have to opt in on 1 Jan 18)
• Completed 12 years of service
•  Are able to obtain 48 months of retainability

The continuation pay for CY18 is 2.5 times the member’s monthly BASIC PAY.  It’s important to note that this is for basic pay only.  Many military members go straight to their LES and look at their gross pay and use that for bonus and retirement calculations.

Military members call it the “hump” after 10 years of service and it typically means we plan on staying in for 20 years—especially for those married with kids.  To take this pay, a military member will have to opt in to the BRS and will have the reduced annuity to 40% and only have 8 years of “saving” with the matching TSP contributions.  The military member will have a 4-year active duty service commitment, so the member will be in for 16 years after taking the continuation pay.

RECOMMENDATION:  Based off this information, and for people having to make the choice in the next couple of years, my recommendation is:  If you’re at 12 years, and know 100% sure you will retire from the Air Force, you should stick with the current 50% annuity retirement system. 

If there’s any chance you’ll get out prior to 20 years, then the continuation pay, plus 4-8 years of TSP contributions can be a nice separation bonus.  If you don’t opt into the BRS and separate before 20 years, under the current system, you get nothing but your unmatched TSP contributions to that point.  Current available information states very few of us will actually do 20 years, so not taking the continuation pay and getting the matching contributions, puts you at risk at separating with nothing.