united states coast guard



R 311100 OCT 17
ACN 120/17
B.  Deputy Secretary of Defense Memorandum, Implementation of the Blended Retirement
System, of 27 Jan 17
C.  Temporary Separations, COMDTINST M1040.6 (series)
1.  This ALCOAST announces Continuation Pay (CP) policies supplementing the CP
multipliers, timing, and obligated service announced in REF (A).
2.  Coast Guard members covered by the Blended Retirement System (BRS) are eligible to
receive CP, which is a one-time, mid-career incentive payment for continued service
upon reaching 12 Years of Service (YOS), calculated from the member’s Pay Entry Base
Date (PEBD). To be eligible to receive CP, members must agree to perform four
additional years of service. Unless specifically prohibited, the obligated service
incurred to receive CP will run concurrently with any other service obligation.
According to REF (A), the CP multiplier for the Active Component (AC) is 2.5 times the
member’s basic pay. The CP multiplier for a Reserve Component (RC) member is 0.5 times
an equivalent base pay as if RC members were on active duty. Reserve Program
Administrators will receive the AC multiplier while active reservists will receive the
RC multiplier. The CP amount will be based on the over 12 YOS basic pay rate.
3.  All members shall receive continuation pay except in the case of members with
separation orders or members who have indicated their intent to separate before
achieving 12 YOS. Neither Section 356 of Title 37, U.S.C., nor REF (B) authorizes
conditions, such as high year tenure, medical or legal issues, which the Coast Guard
can cite as a basis to deny CP. Uncertainty of a Coast Guard member’s future status
does not constitute a members inability to obligate for additional service with
respect to CP.
4.  AC members will perform obligated service in the AC. An AC member seeking
affiliation with the RC during their four year CP obligation will be required to repay
a prorated amount of CP. IAW REF (C), members who incur an active duty obligation to
receive CP are ineligible to request Temporary Separation (TEMPSEP). Members who opted
into BRS are not eligible for CP during TEMPSEP.
5.  RC members will perform obligated service in the Selected Reserve. A member who
incurs a period of extended absence, such as the Inactive Ready Reserve, subject to
the approval of the Coast Guard, which precludes meeting the terms of the obligated
service, shall have any CP installments suspended during this period. If subsequently
reassigned to the member’s previous status, or a new status at the discretion of the
Coast Guard, CP installments may resume and the term of service extended accordingly
to fulfill the original obligated service agreement. Failure to meet reinstatement
criteria shall result in termination of CP and repayment as appropriate.
6.  Approximately 180 days prior to a member’s completion of 12 YOS, PPC will notify
the member and unit admin of the member’s eligibility to receive CP. The member must
return the signed CP election form, witnessed by their Commanding Officer or command
designee 30 days prior to their CP date. A members CP date is defined as that date
12 YOS from the members PEBD, as established by the Coast Guard, and deemed to be
the point at which a member has met all eligibility requirements for CP. For example,
additional obligated service would commence on the 12th anniversary of the members
PEBD regardless of when the member’s election to receive CP is completed. A member
may reverse their decision to receive CP, and their obligation to complete four
additional years of service, provided such a reversal occurs 30 days before the
member's CP date. A member failing to return the CP election form prior to exceeding
12 YOS will no longer be eligible for CP. No waivers will be accepted for failing to
make the CP election prior to 12 YOS.
7.  While BRS eligible Coast Guard members who reach their 12th YOS in calendar year
2018 have all of calendar year 2018 to opt in to the BRS, they will only have until
the anniversary date of their 12th YOS from their PEBD to elect to receive CP (e.g.
a member with a PEBD of 6 February 2006 who reaches their 12th YOS from their PEBD
on 5 February 2018 will only have from 1 January 2018 to 5 February 2018 to elect
to receive CP, but will have until 31 December 2018 to opt into the BRS). If a member
wishes to elect CP, they must first opt in to BRS. Actual payment of CP may occur
after the member’s 12th YOS from their PEBD, but the CP agreement must be submitted
no later than the anniversary of a member’s 12th YOS determined by PEBD.
8.  A member who qualifies for CP may choose to receive CP in a single payment or
elect a series of equal installments, not to exceed four equal annual payments over
four consecutive years.
9.  CP is subject to applicable taxes, however, the CG shall apply Combat Zone Tax
Exclusion (CZTE) withholding rules to those members whose gross incentive payment
qualifies for CZTE. CZTE withholding rules will apply to all payment proceeding
from a CP agreement based upon the member’s qualification for CZTE at his/her date.
For example, a member who reaches 12 YOS from PEBD in a qualified combat zone and
elects four equal CP installment payments across four years would be eligible for
CZTE for all of those payments.
10.  PSC will retain a copy of the CP Election Form in the EIPDR.
11.  A member who received CP but who fails to complete the required period of
obligated service is subject to full or partial repayment IAW Section 373 of Title
37, U.S.C., and the DoD FMR, Volume 7A, Chapter 2. The Coast Guard will pursue
repayment of unearned CP to the maximum extent possible. Waiver requests shall be
submitted to COMDT (CG-133) via the member’s chain of command and shall be
adjudicated in accordance with all existing authorities and policies. Repayment
may be waived in whole or in part if COMDT (CG-133) determines that recovery would
be against equity and good conscience or contrary to the best interests of the
United States. Repayment may not be waived if the member’s separation is due to
misconduct. Repayment must be waived, and any remaining payments will be included
in the final settlement of unpaid pay and allowances if the member:
     A.  Dies (does not apply if death is the result of member’s misconduct);
     B.  Is separated or retired due to a physical disability which qualifies the
member for Disability Severance Pay or Disability Retired Pay from the Coast Guard
(does not apply if disability is the result of the member’s misconduct); or,
     C.  If a member is separated under a mandatory early retirement or separation
12.  This policy will be included in the forthcoming Retirement Manual, which will
be released within the next year.
13.  Questions regarding the BRS or related items should be directed to COMDT
(CG-1331) at For more info visit the BRS website
14.  Released by RDML William G. Kelly, Assistant Commandant for Human Resources.
15.  Internet release is authorized.