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Other than that, there's no reason whatsoever.
So if they claim it before the year ends, it wont reset right away and you wont be gaining new XP?
By claiming the Service Medal, your level 40 will change to level 1, and you'll receive the Service Medal of the current year.
If you do keep level 40 and be playing without claiming the Service Medal, the gained XP will probably be lost along the way, as level 40 is the maximum level, isn't it?
I, personally, haven't tried it myself - I've always traded my XP for the Service Medal the moment it was available without any hesitation whatsoever.