The Army has ended the Temporary Early Retirement Authority (TERA) program. Service members eligible for TERA must have submitted a request through their chain of command by January 15, 2018 for early retirement consideration. The authority to approve TERA was terminated on February 28, 2018.

The authority to utilize TERA until December 31, 2025 is for force-shaping of active military forces. So while the use of TERA is still authorized, the conditions for its use are not applicable at the present time.

The FY 2012 National Defense Authorization Act (NDAA), Public Law 112-81, enacted 31 December 2011, authorized the military services to offer early retirement to Service members who have completed at least 15 years of active service. This is a discretionary authority and not an entitlement. The Army has elected to use this limited program as part of a comprehensive force management strategy to shape the force. It does not apply to Service members of the Army National Guard or the U.S. Army Reserve.

TERA does not apply to Active duty Service members since the Army ended the program.

TERA retired pay is generally calculated using the same formula that is used for 20-or-more-year retirements, but it includes an early retirement reduction factor. The calculation is 2.5 percent of the average of the highest 36 months of base pay times the number of years of service, times the TERA reduction factor. Reduction factors are based upon the number of months that retirement is taken before the 20-year minimum (1/12^th of 1% for each month of early retirement).

Example:

E-7 with 15-years, 7-months, and 13 days of service and a high 36-monthly average basic pay of $3,783.50 would be computed as follows:

RPB - Retired Pay Base (i.e. high 36 monthly average basic pay)
AS - Active Service (in months)
MO - Months in a year
RPF - Retired Pay Percentage Factor
TRF - TERA Reduction Factor (from TERA Reduction Factor table above)

RPB × ((AS ÷ MO) × RPF) × TRF =
$3,783.50 × (((187 ÷ 12) × .025) × .95667 =
$3,783.50 × (15.5833 ×.025) × .95667 =
$3,783.50 × .3896 × .95667 = $1,410.18
(Since this is not a multiple of $1, round down to $1,410.00)
Reductions for officers are based upon their service beginning on their 1405 service dates.

TERA and the Career Status Bonus (CSB)

Service members who entered the military on or after 1 August 1986 are eligible to accept a $30,000 CSB at 15 years of service if they agree to serve at least 20 years. Generally, the retired pay for Service members who opt to receive the CSB is calculated at 2 percent of their "retired pay base" (average of highest 36 months of active duty base pay) for each of their first 20 years of service, plus 3.5 percent for each of their next 10 years of service, plus 2.5% for each year of service over 30 years. In addition, cost-of-living adjustments (COLAs) to retired pay are applied at 1% less than increases in the Consumer Price Index (CPI) until age 62, at which time their retired pay is recalculated to the amount it would have been if the full COLAs had been applied since retirement. Thereafter, COLAs are again applied at 1% less than the CPI without further recalculations throughout their retirement. For more information, refer to the Defense Finance and Accounting Service (DFAS) website at https://www.dfas.mil/retiredmilitary/plan/estimate/csbredux/

Service members who have accepted the $30,000 CSB at their 15-year point but who are later approved for early retirement under TERA will not be required to repay the CSB. However, their retired pay will be subject to a reduction factor because of their early retirement. TERA, likewise, has a reduction factor, so both reduction factors are applied.

Example:

Same example as above (E-7 with 15-years, 7-months, and 13 days of service and a high 36-monthly average basic pay of $3,783.50). TERA/CSB retired pay would be computed as follows:

RPB - Retired Pay Base
360 - 30-Years (360-months)
AS - Active Service (in months)
MO - Months in a year
RPF - Retired Pay Percentage Factor
RRF - CSB REDUX Reduction Factor (1%)
TRF - TERA Reduction Factor (from TERA Reduction Factor table above)

RPB × ((AS ÷ MO) × RPF) - (((360 - AS) ÷ MO) ×RRF)) × TRF =
$3,783.50 × ((187 ÷ 12) × .025) - (((360 - 187) ÷ 12) × .01)) × .95667 =
$3,783.50 × ((15.5833 ×.025) - ((173 ÷ 12) × .01)) × .95667 =
$3,783.50 × (.3896 - (14.42 × .01)) × .95667 =
$3,783.50 × (.3896 - .1442) × .95667 =
$3,783.50 × .2454 × .95667 = $888.24
(Since this is not a multiple of $1, round down to $888.00)

If this Service member had not taken the CSB, his TERA retired pay would be $1,410.00.

Army Directive 2107-38 (Termination of Temporary Early Retirement Authority):
https://federalnewsnetwork.com/wp-content/uploads/2018/01/ARN6976_AD2017-38_Web_Final.pdf

U.S. Public Law 112-81, Section 504, FY 2012 NDAA, 31 DEC 2011:
https://www.govinfo.gov/content/pkg/PLAW-112publ81/html/PLAW-112publ81.htm

DoD Instruction 1332.46: 
https://www.esd.whs.mil/Portals/54/Documents/DD/issuances/dodi/133246p.pdf?ver=2018-12-21-122012-280

Access the MyArmyBenefits calculator to calculate your retirement pay:
https://myarmybenefits.us.army.mil/benefit-calculators/retirement

For more detailed information on retirement pay, please visit Army Retirement Services Office (RSO) at:
https://soldierforlife.army.mil/retirement/rso

Army Human Resources Command web site:
https://www.hrc.army.mil

Defense Finance and Accounting Service site at:
https://www.dfas.mil

U.S. Army Article:
https://www.army.mil/article/198580/as_early_retirement_program_ends_soldiers_have_until_jan_15_to_apply

2012-2025 Temporary Early Retirement Authority:
https://www.dfas.mil/retiredmilitary/plan/retirement-types/2012-18tera/

Extension of Accounting Policy Guidance for Implementing Temporary Early Retirement Authority (TERA) Procedures:
https://comptroller.defense.gov/Portals/45/Documents/tera/Extension_of%20TERA_Policy_Guidance-FY2026_Signed_25un19.pdf

FY 2023 Military Personnel Retired Pay Tables for the Temporary Early Retirement Authority (TERA) Program:
https://comptroller.defense.gov/Portals/45/Documents/tera/FY2023-TERA_Rates.pdf