Thrift Savings Plan

Participant Behavior

and Demographics

Analysis of 2010 – 2014
Introduction

This analysis of Thrift Savings Plan (TSP) participant demographics prepared by the Federal 

Retirement Thrift Investment Board is based on participant data enhanced with additional 

indicative data from the Office of Personnel Management (OPM). The analysis of calendar year 

2014 data is similar to analysis of data conducted in previous years. 

As with the 2013 report, the 2014 analysis will focus solely on participants in FERS, the Federal 

Employee Retirement System, as the participant population in the Civil Service Retirement 

System (CSRS) is a very small and declining segment of the TSP. Information from this 

analysis provides insight on demographics, investment behaviors and how plan design changes 

may influence participation and contribution behaviors. Finally, this analysis helps us identify 

trends with the participant usage of benefit options.

Background

The Federal Retirement Thrift Investment Board is an independent Federal agency that was 

established to administer the Thrift Savings Plan (TSP) under the Federal Employees’ 

Retirement System Act of 1986 (See 5 U.S.C. §§ 8351; 8401 et seq.). Similar to the type of 

savings and tax benefits that many private corporations offer their employees under I.R.C.

§401(k) plans, the TSP provides Federal civilian employees and members of the uniformed 

services the opportunity to save for additional retirement security. The Agency’s mission is to 

act solely in the interest of its participants and beneficiaries. 

TSP participants can invest their employee and employer contributions in the following core 

funds:

• Government Securities Investment Fund (G Fund)

• Fixed Income Index Investment Fund (F Fund)

• Common Stock Index Investment Fund (C Fund) 

• Small Cap Stock Index Investment Fund (S Fund) 

• International Stock Index Investment Fund (I Fund) 

In addition to these indexed core funds, participants may also invest in five Lifecycle Funds (L

Funds). The L Funds are custom target-date funds invested exclusively in the G, F, C, S, and I 

Funds.

During the period covered by this report, the TSP underwent two major plan design changes. 

The implementation of automatic enrollment occurred in August 2010, and the acceptance of 

Roth contributions commenced in May 2012. The ongoing impact of these changes on 

participant behavior will be discussed in this analysis. 

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Data Collection and Methodology

This report is based on data extracted from the TSP recordkeeping system, which was 

enhanced with information from OPM. In each year covered by this report, the TSP provided 

extract data on the accounts of all TSP participants identified as active civilian Federal 

employees. OPM enhanced the data by comparing it to their database of Executive Branch and 

Postal Service employees and added data on participants’ annual salary, length of Federal 

service, employment (full-time vs. part-time) status, gender, race and ethnicity, and education. 

Not all records for participants on the TSP extract can be matched with OPM data. In 2014, a 

total of over 2.6 million participants were identified by the TSP, and OPM returned data on 

approximately 2.4 million employees. A similar ratio of total records extracted to records 

matched was seen in other years covered by this report. The inability to match some TSP 

records to OPM data occurs when OPM or TSP data is incomplete. Additionally, since OPM 

does not collect data on employees of the Legislative and Judicial Branches, OPM is not able to 

match against those records. Part-time or intermittent employees are identified in the dataset;

however, they are excluded from the analysis because their hourly work schedule (and 

therefore their actual compensation) is not known. While the TSP maintains records for a large 

number of retired or otherwise separated participants, such participants are not active and are 

therefore not considered within the context of this report. Lastly as previously noted, this report 

focuses solely on the FERS population, and records for approximately 129,000 CSRS 

participants were excluded from the analysis. See the table in Appendix A for a summary of the 

demographics of fulltime FERS participants included in this analysis. The tables in Appendices 

B and C provide additional demographic summaries of fulltime FERS participants based on their 

contributing or non-contributing status.

In this report, salaries are shown in quintiles. The first quintile represents the 20% of all records 

in the lowest annual salary band; the fifth quintile represents the 20% of records in the highest 

salary band. Data on salary ranges for the quintiles in each year can be found in Appendix D.

In summary, the analysis provided in this report is subject to the following limitations:

The exclusion of TSP accounts for employees of the Legislative and Judicial 

Branches may modestly distort the findings. 

The exclusion of TSP accounts that cannot be matched with OPM data may modestly 

distort the findings. 

The exclusion of TSP accounts for part-time and intermittent workers is likely to have 

a more meaningful impact on the findings. Since this group is likely to participate and 

contribute at lower rates than full-time employees, the findings may marginally 

overestimate the rates of participation and deferral of the total TSP participant base. 

Employees’ actual deferral rates are not included in the TSP or OPM databases. 

Therefore, an approximation of annualized deferral rate is calculated by comparing 

the total employee contributions to the annual salary rate for each calendar year. 

Analysis

The following sections of this report examine the behaviors of FERS participants across a fiveyear timeframe ending December 31, 2014 and through the lens of six demographic filters –

age, tenure, salary, gender, race and ethnicity, and education. The exhibits and narratives 

display the relationships between these demographic factors and participant behaviors

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associated with participation and automatic enrollment; contribution deferral rates; investment 

allocation and activity; and loan and hardship withdrawal usage. 

Plan Participation

FERS participation was at a five-year high of 89.9% by the end of 2014. Figure 1 illustrates the 

steady improvement in the participation rate since the implementation of automatic enrollment 

for new hires in August 2010. Automatic enrollment provides that new employees automatically 

have 3% of their salary deferred into the TSP unless the employee makes an active election not 

to participate in the Plan. Until September 2015, contributions for automatically enrolled 

participants were defaulted into the Government Securities Investment (G) Fund. With the 

passage of the Smart Savings Act, Public Law 113-255, the default investment fund for new

participants changed from the G Fund to an age-appropriate Lifecycle (L) Fund. Automatic 

enrollment has meant that not only do participants immediately receive the Agency 1% 

Automatic contribution, but they also start deferrals and receive matching contributions 

immediately upon hire. 

Figure 1

As reported in 2013, automatic enrollment continues to be a success in improving the 

participation of the less tenured. Historically, participation has been lowest among the newest 

employees, those with two or less years of employment, with rates of participation gradually 

increasing as the length of tenure increased. However, with the introduction of automatic 

enrollment in August 2010, this trend has strongly shifted and now the shortest-tenured 

employees have the highest 

participation rates. As shown in figure

2, participation among the shortesttenured was the lowest at 82.1% in 

2010 while the longest-tenured 

participated at a rate of 89.9%. By 

2014, those with less than two years of 

tenure participated at a rate of 98.4% -

the highest rate of participation among 

all tenure bands and more than 9% 

higher than the longest-tenured cohort. 

After automatic enrollment, the two lowest 

tenure cohorts now have participation rates 

above 90%. Those with less than two-years 

of tenure have the highest rate of participation 

at 98.4% while those with two to five years of 

tenure are at 92.4% participation

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As times elapses since the implementation of automatic enrollment, its impact on other tenure 

cohorts becomes apparent. Participants with two to five years of tenure (92.4%) now participate 

at a rate higher than the longest-tenured (89.1%)

Figure 2

Automatic enrollment has also led to similar improvements in the participation of the youngest 

and lowest-paid. In 2010, the participation rate for the under age 29 cohort was the lowest 

among all age cohorts at 83.9%, while the age 60-69 cohort had the highest participation at 

89.0%. By 2014, the youngest cohort had surpassed all other age cohorts and had the highest

rate of participation – 94.6% while the second youngest cohort (age 30-39) trailed closed behind 

with a participation rate of 92.4%. In 2010, participation rates among the lowest-paid quintile 

trailed that of the highest paid by approximately 

20%. By 2014, the difference between the two 

quintiles was reduced to 10%. However, it is 

worth noting that rate of improvement was not as 

significant among the second salary quintile –

the lower paid. Participation among this group 

increased 0.8% from 83.4% in 2010 to 84.2% in 

2014. When examining participation by race and 

ethnicity cohorts, participation among black, 

Native American, and multi-racial cohorts had 

the most improvement during this report period. 

However, participation among blacks at 83.7% lags significantly behind Asians who have the 

highest participation rate of 95.3%. It should be noted that males and females have 

consistently participated at nearly the same rate for each year in this reporting period. See 

Table 1 below:

Automatic enrollment has 

improved participation among the 

lowest paid by nearly 10%, 

growing from 76.2% in 2010 to 

85.8% in 2014.

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Table 1

Annual FERS Participation Rates by Demographic Cohorts

2010 2011 2012 2013 2014

Age

<= 29 83.9% 89.1% 91.7% 93.3% 94.6%

30 – 39 85.7% 88.2% 89.5% 90.5% 91.3%

40 – 49 86.1% 87.1% 87.6% 88.0% 88.4%

50 – 59 88.0% 88.5% 88.7% 88.9% 89.0%

60 – 69 89.0% 89.1% 89.1% 89.1% 89.1%

70+ 87.1% 87.3% 87.5% 87.8% 87.2%

Tenure

Less than 2 years 82.1% 92.6% 98.2% 98.3% 98.4%

2-5 years 83.3% 84.2% 86.7% 89.5% 92.4%

6-10 years 86.8% 88.0% 87.9% 87.6% 87.4%

11-20 years 88.0% 88.2% 87.8% 87.7% 87.9%

21+ years 89.9% 89.7% 89.5% 89.5% 89.1%

Salary Quintile

Q1 Lowest Paid 76.2% 80.6% 82.7% 84.3% 85.8%

Q2 Lower Paid 83.4% 83.8% 83.6% 83.8% 84.2%

Q3 Mid-Range 87.3% 88.3% 89.0% 89.4% 89.1%

Q4 Higher Paid 91.3% 92.4% 92.8% 93.1% 93.3%

Q5 Highest Paid 95.1% 95.4% 95.6% 95.7% 95.8%

Gender

Female 86.6% 88.0% 88.6% 89.1% 89.5%

Male 86.7% 88.2% 88.9% 89.3% 89.7%

Race and Ethnicity

American Indian or Native Alaskan 82.0% 84.2% 85.3% 85.7% 86.1%

Asian or Other Pacific Islander 92.2% 93.7% 94.5% 95.0% 95.3%

Black or African American 79.6% 81.9% 82.6% 83.3% 83.7%

White 89.1% 90.8% 91.7% 92.3% 92.6%

Hispanic Or Latino 86.0% 88.0% 88.9% 89.4% 89.8%

Multi-Racial 84.1% 88.2% 90.0% 91.0% 91.7%

Unknown 84.6% 84.2% 83.9% 84.1% 84.6%

Education

Without High School Diploma 73.7% 76.7% 77.4% 77.8% 77.9%

High School Diploma 78.1% 83.2% 84.5% 85.0% 85.4%

Some College or Training 82.4% 86.3% 87.1% 87.7% 88.1%

Bachelor's Degree 90.4% 93.1% 93.7% 94.0% 94.3%

Post-Bachelor's Education/Degree 91.6% 94.6% 95.1% 95.5% 95.7%

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While automatic enrollment has significantly increased participation among the newly hired, it 

has not, thus far, resulted in a significant increase in the number of participants who remain 

“unengaged” or otherwise make no investment/deferral election. The vast majority of autoenrolled participants are remaining in the Plan, and of this population, 62.3% are actively

making deferral rate changes, while others are showing signs of life by having made interfund 

transfers or other transactions. However, as shown in figure 3, those who remain in the autoenrolled status (no deferral change or investment activity) are mostly in the lowest salary

quintiles.

Figure 3

Contribution Deferral Rates

The FERS contribution deferral rate (includes employee Roth, traditional and catch-up 

contributions) has remained relatively flat during the five years since the implementation of 

automatic enrollment, dropping slightly to 8.1% in 2014 as shown in figure 4. While the FERS 

rate exceeds the 5.9% average deferral 

percent (ADP)1 of other defined 

contribution plans, it is significantly 

lower than the 9.5% FERS deferral 

rates of the mid-2000s. Although there 

may be a number of factors causing the 

decline in deferral rates, it must be 

noted that current rates are even lower 

than they were in 2008 and 2009 at the 

height of the economic downtown. In 

comparison, participation rates have 

improved steadily since the economic 

1 “For [Non-highly compensated employees], the median ADP was 5.9% . . ., while the median ADP for [highly 

compensated employees was 7.0%. . . .” Deloitte, Annual Defined Contribution Benchmarking Survey – Ease of 

Use Drives Engagement in Saving for Retirement, 2015 Edition

Figure 4

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downturn, largely attributable to automatic enrollment. While 62.3% of automatically-enrolled 

participants change their deferrals from the 3% default rate, automatic enrollment, nevertheless, 

appears to have had an overall dampening effect on deferral rates.

Figure 5 illustrates the power of plan design on participant behavior. FERS participants receive 

dollar-for-dollar matching contributions on the first 3% of pay and 50 cents on the dollar on the 

next 2%. The full match is achieved with a 5% contribution. Consequently, deferral rates 

aggregate in the 5-6% range, with 30.5% of TSP contributors being in this range in 2014. Of 

significant note, 25.6% of participants are not receiving the full matching contribution as they are 

contributing less than 5%.

Figure 5

As expected, the lowest-paid participants are deferring the least – 4.7% less than the highest 

paid. See table 2. However, with an average deferral rate of 5.1%, the lowest paid are 

receiving the full match. Also as expected, the youngest and shortest-tenured participants have 

the lowest deferral rates with deferrals steadily 

increasing with age and tenure. Deferral rates 

also increase in correlation with education 

level. During each year in this report period, 

males have contributed about six-tenths of one 

percent more than females. Deferral rates 

among blacks at 6.2%, significantly lags 

behind Asians who have the highest deferral 

rate of 10.0%, whites at 8.1% and Latinos at 

7.5%.

Participants with less than 

two years of tenure had an 

average deferral rate of 3.7% 

in 2014. They are the only 

tenure cohort that is not, on 

average, receiving the full 

match. 

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Table 2

Annual FERS Deferral Rates by Demographic Cohorts

2010 2011 2012 2013 2014

Age

<= 29 4.7% 5.0% 5.2% 4.9% 4.9%

30 – 39 6.1% 6.2% 6.3% 6.1% 6.1%

40 – 49 7.4% 7.4% 7.4% 7.1% 7.2%

50 – 59 9.1% 9.2% 9.2% 9.0% 9.0%

60 – 69 10.5% 10.5% 10.5% 10.3% 10.2%

70+ 11.9% 11.8% 11.9% 11.6% 11.4%

Tenure

Less than 2 years 3.9% 4.2% 4.1% 3.8% 3.7%

2-5 years 6.4% 6.6% 6.6% 6.3% 6.4%

6-10 years 7.8% 7.9% 7.9% 7.6% 7.6%

11-20 years 8.6% 8.8% 8.7% 8.6% 8.7%

21+ years 9.4% 9.4% 9.5% 9.4% 9.4%

Salary Quintile

Q1 Lowest Paid 5.1% 5.2% 5.4% 5.1% 5.1%

Q2 Lower Paid 7.3% 7.5% 7.5% 7.4% 7.4%

Q3 Mid-Range 7.6% 7.5% 7.5% 7.3% 7.5%

Q4 Higher Paid 8.4% 8.7% 8.8% 8.6% 8.7%

Q5 Highest Paid 9.7% 9.7% 9.8% 9.7% 9.8%

Gender

Female 7.4% 7.4% 7.5% 7.4% 7.4%

Male 8.0% 8.1% 8.1% 8.0% 8.0%

Race and Ethnicity

American Indian or Native Alaskan 6.2% 6.2% 6.2% 6.1% 6.2%

Asian or Other Pacific Islander 9.6% 9.7% 9.9% 9.8% 10.0%

Black or African American 5.7% 5.8% 5.9% 5.8% 5.9%

White 8.0% 8.1% 8.2% 8.0% 8.1%

Hispanic Or Latino 7.3% 7.5% 7.6% 7.4% 7.5%

Multi-Racial 6.5% 6.7% 6.9% 6.7% 6.8%

Unknown 8.1% 8.1% 8.0% 7.9% 7.8%

Education

Without High School Diploma 5.8% 5.9% 5.9% 5.7% 5.8%

High School Diploma 6.6% 6.7% 6.8% 6.5% 6.6%

Some College or Training 7.1% 7.1% 7.2% 6.9% 7.0%

Bachelor's Degree 8.2% 8.4% 8.5% 8.3% 8.5%

Post-Bachelor's Education/Degree 8.7% 8.8% 8.9% 8.8% 8.9%

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Roth TSP was introduced in May 2012. With Roth TSP, paticipants make contributions from 

after-tax dollars, and their earnings on these contributions are tax-free at withdrawal as long as 

certain IRS requirements are met. While the majority of participants continue to defer only 

traditional (pre-tax) contributions, deferrals to Roth TSP are increasing. For those contributing 

to Roth, their average deferrals were 4.9% as opposed to the average traditional deferral of 

7.6%. (Roth and traditional average deferral rates do not include catch-up contributions which 

are reflected in the deferral rates shown in Figures 4 and 5.) 

Roth deferral rates are highest among older participants, as well as the most-tenured and 

highest-paid. However, all demographic cohorts experienced an increase in Roth deferrals in 

2014. 

 Table 3

FERS Traditional and Roth Deferral Rates 

by Demographic Cohorts

2013 2014

Traditional Roth Traditional Roth

Age

<= 29 4.6% 3.5% 4.5% 3.9%

30 – 39 5.8% 3.5% 5.8% 3.9%

40 – 49 7.0% 3.5% 6.9% 3.9%

50 – 59 8.4% 4.2% 8.4% 4.7%

60 – 69 9.5% 5.6% 9.4% 6.0%

70+ 10.6% 6.1% 10.4% 6.8%

Tenure

Less than 2 years 3.4% 3.1% 3.2% 3.2%

2-5 years 6.0% 3.8% 5.9% 4.4%

6-10 years 7.2% 3.8% 7.2% 4.2%

11-20 years 8.2% 4.0% 8.3% 4.4%

21+ years 8.9% 4.2% 8.9% 4.6%

Salary Quintile

Q1 Lowest Paid 5.0% 3.0% 4.8% 3.4%

Q2 Lower Paid 7.2% 3.7% 7.1% 4.1%

Q3 Mid-Range 7.0% 3.7% 7.2% 4.3%

Q4 Higher Paid 8.2% 4.1% 8.3% 4.5%

Q5 Highest Paid 9.1% 4.4% 9.1% 4.8%

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Investment Allocation and Inactivity 

In Figure 6, we note that allocations to the G Fund 

appropriately increase as the age of the TSP’s population 

increases. This behavior is consistent with the expectation that 

participants shift their investment allocation toward the relative 

safety of income producing assets as they approach retirement 

age. The noteworthy exception to this observation is in the 

grouping of participants aged 29 and under. In this age cohort, 

we note that participants invest a disproportionate percentage 

(41.7%) of their accounts in the G Fund, probably as a result of 

the default investment option being the G Fund. This is an 

improvement from 2013 when the youngest participants held 

43.6% of their assets in the G Fund.

Figure 6

We note that the shortest-tenured participants, those with less than two years of tenure, have 

the highest allocation to the G Fund, approximately 54.9%. Although we previously noted that 

the majority of automatically enrolled participants changed their contribution deferral rate, this 

concentration in the G Fund suggests that these participants are not “engaging” and shifting 

their investments away from the default allocation of the G Fund. Further, the lowest-paid 

participants have approximately 53.8% allocated to the G fund as compared to the highest paid 

who allocated only 25.6% to the G Fund. Females had a slightly higher allocation to the G Fund 

at 34.4% as compared to males at 30.8%. Additionally, blacks are allocated 41.4% to the G 

Fund, well above the allocation levels Asians at 30.2% and whites at 27.9%. See Table 4.

When examining L Fund allocations, the two youngest age cohorts had the highest level of 

usage at 29.2% and 28.7% while the two oldest age cohorts had L Fund allocations of 14.0% 

and 8.5%. We also want to note that L Fund usage is highest among the 2-5 years tenure 

cohort (26.8%) and the 6-10 years group (27.3%). The majority of the participants in these two 

cohorts began Federal service after the implementation of the L Funds in 2005. Usage of the L 

Funds drops off somewhat with the less than two years tenure cohort (19.2%), where the impact 

of auto-enrollment and inertia are likely factors. This group was also the only cohort that did not 

The youngest participants 

who have the longest time 

horizon to reap the 

benefits of compounding 

returns have 41.7% of 

their assets invested in 

the G Fund.

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experience an uptick in L Fund allocations in 2014. With the change to the default investment 

fund in 2015, the L Funds allocation for this cohort is likely to change. See Table 4.

Table 4

2014 Investment Allocations by Demographic Cohorts

G Fund F Fund C Fund S Fund I Fund L Funds

Age

<= 29 41.7% 1.7% 12.4% 10.1% 4.9% 29.2%

30 – 39 28.2% 2.7% 19.4% 13.4% 7.7% 28.7%

40 – 49 24.9% 4.1% 32.6% 13.1% 6.5% 18.8%

50 – 59 33.4% 5.1% 30.1% 10.3% 4.7% 16.4%

60 – 69 41.6% 6.0% 26.2% 8.4% 3.8% 14.0%

70+ 47.5% 6.2% 26.9% 7.5% 3.3% 8.5%

Tenure

Less than 2 years 54.9% 1.9% 12.5% 7.8% 3.7% 19.2%

2-5 years 42.1% 3.0% 13.6% 9.9% 4.7% 26.8%

6-10 years 34.9% 3.2% 15.8% 12.0% 6.8% 27.3%

11-20 years 27.6% 5.0% 30.9% 12.7% 6.4% 17.4%

21+ years 33.1% 5.2% 32.6% 9.9% 4.3% 14.9%

Salary Quintile

Q1 Lowest Paid 53.8% 3.5% 17.7% 7.5% 4.1% 13.4%

Q2 Lower Paid 43.8% 4.8% 27.0% 8.3% 4.1% 12.0%

Q3 Mid-Range 38.6% 4.6% 25.6% 9.9% 4.9% 16.4%

Q4 Higher Paid 31.1% 4.4% 26.1% 12.1% 5.9% 20.4%

Q5 Highest Paid 25.6% 5.1% 32.9% 11.9% 5.5% 19.0%

Gender

Female 34.4% 5.1% 28.4% 9.4% 4.9% 17.7%

Male 30.8% 4.5% 29.4% 11.9% 5.5% 17.8%

Race and Ethnicity

American Indian or Native Alaskan 39.2% 4.7% 25.9% 10.1% 4.7% 15.4%

Asian or Other Pacific Islander 30.2% 4.6% 29.1% 13.1% 6.3% 16.6%

Black or African American 41.4% 4.7% 25.5% 9.6% 5.0% 13.8%

White 27.9% 4.7% 29.9% 11.5% 5.5% 20.4%

Hispanic Or Latino 34.1% 4.0% 26.4% 12.5% 6.1% 16.9%

Multi-Racial 31.8% 4.2% 24.2% 12.4% 6.2% 21.3%

Unknown 42.1% 5.2% 29.1% 8.5% 3.9% 11.1%

Education

Without High School Diploma 48.2% 4.3% 24.0% 8.1% 4.4% 11.1%

High School Diploma 38.7% 3.9% 23.7% 10.9% 5.5% 17.3%

Some College or Training 37.0% 4.3% 25.6% 10.9% 5.1% 17.0%

Bachelor's Degree 27.4% 4.5% 30.8% 12.2% 5.6% 19.4%

Post-Bachelor's Education/Degree 25.9% 5.3% 31.1% 11.3% 5.7% 20.7%

12 | Page
Of the participants utilizing the L Funds, the allocation is largely as we would hope. Those in the 

age 29 and under cohort were appropriately taking advantage of the L2040 and L2050 Funds.

Participants who would likely retire between 2025 and 2035 (the 40-49 age group) were in 

L2030 and L2040 Funds. The age 50-59 cohort was aggregated in the L2020 and L2030 

Funds. Participants aged 60-69 were solidly investing in the L2020, while those 70 and over 

had the highest allocation in the L Income Fund. See Figure 7.

Figure 7

The L Funds' strategy is to invest in an appropriate mix of the G, F, C, S, and I Funds for a 

particular time horizon. The investment mix of each L Fund becomes more conservative as its 

target date approaches. Thus, the participant only needs to invest in one L Fund in order to 

achieve diversification among the core funds. As shown in Figure 8, the use of one L Fund is 

most common with the two youngest age cohorts – 7.1% for those age 29 and under and 7.9% 

for those age 30 to 39. While the percent of participants who invest solely in the F, C, S, and I 

Funds is minor, all age cohorts have a significant percentage of participants investing solely in 

the G Fund. In fact, the majority (58.2%) of the under age 29 cohort is invested solely in the G 

Fund. See Figure 8.

Figure 8

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Figure 9 below reports on the percentage of participants who have not engaged in any 

investment activity, i.e., they did not change how their contributions are invested or make a 

change to their existing investment allocation in 2014. As illustrated in the chart, the majority of 

participants do not actively manage their TSP accounts. In 2014, there was nearly a two 

percent increase in the number of participants who did initiate any investment activity. When 

examining investment inactivity by other demographic filters, only two cohorts had less than 

80% inactive participants – highest paid at 78.2% and tenured 21 or more years at 79.9%.

Figure 9

Loan and Hardship Withdrawal Usage

The TSP allows two types of loans – general purpose and residential. A general purpose loan 

has a repayment term of 1 to 5 years, while a residential loan for the purchase of a primary 

residence has a repayment term of 1 to 15 years. Participants may have only one of each loan 

type outstanding at the same time. Participants may only borrow their employee contributions

and the minimum loan amount is $1,000.

Loan usage has consistently been highest among the 30-39 and 40-49 age cohorts, with 

approximately 11% of the participants in each cohort receiving a loan in 2014. This is 

approximately a one percent drop from 2013 loan usage rates for both cohorts. In fact, all age 

groups experienced a decrease in loan usage in 2014. See figure 10 for loan usage by age 

cohort for each year in the reporting period. 

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Figure 10

When automatic enrollment was introduced to the Plan, there was residual concern that 

participants who could not truly afford to contribute would access their TSP funds via a loan or 

hardship withdrawal at higher rates than those who intentionally elected to contribute. However, 

as illustrated in Figure 11, loan usage among those were auto-enrolled is miniscule. (Note:

Chart does not include 2010 data because automatic enrollment was not introduced until August 

of that year.) Loan usage is higher among those participants who opted out of automatic 

enrollment, suggesting that this is population that could not afford to contribute. Nonetheless, 

only 2.8 of this cohort received a loan in 2014 as compared to 7.7 loan usage rate for those 

participants who elected to contribute to the Plan.

Figure 11

Loan usage is fairly low among the least-tenured at 3.7%. However, as participants move into 

the 2-5 year tenure cohort and accrue assets, loan usage jumps to 9.4% and remains at 

approximately 10% for all other cohorts. Loan usage is fairly even among all salary quintiles, 

ranging from approximately 10% to 11% for four out of the five quintiles. The loan usage rate 

among the highest paid was at 7.1% in 2014. Males and females also had similar rates of loan 

usage with 9.1% of males and10.2% of females receiving loans in 2014. However, there is 

15 | Page
noticeable difference in loan usage among educational and racial/ethnic cohorts. Loan usage 

drops off with an increased level of education. Only 6.4% of participants with post-bachelor’s 

education received a loan in 2014 as compared to nearly double that amount among those 

without a high school diploma (12.4%). There is a similar disparity in loan usage among racial 

and ethnic cohorts with whites and Asians having significantly lower loan usage than other 

groups.

Participants may take a hardship withdrawal if they have a financial need as the result of a 

recurring negative cash flow, medical expenses, a personal casualty loss, or legal expenses

associated with a divorce. Participants may only withdraw their employee contributions, and the 

minimum withdrawal amount is $1,000. In addition to a 10% early withdrawal penalty if the 

participant is younger than 59 1⁄2, employee contributions are suspended for six months after a 

hardship withdrawal. As a result of the employee contribution suspension, FERS participants

do not receive any Agency Matching Contributions during this period.

Hardship withdrawal usage is consistently highest among the age 40-49 cohort, with 4% to 5% 

of participants in this cohort receiving a hardship withdrawal during the five years covered in this 

report. All cohorts experienced a slight decrease in hardship withdrawal usage in 2014 over the 

previous year.

Figure 12

There is a stair-step pattern of hardship withdrawal usage among the salary quintiles, with 

usage generally declining as salary levels increase. See figure 13. However, the first quintile

presents an exception to this pattern, as hardship withdrawals were lower than those of the next 

highest quintile in each of the years examined. It is important to note that hardship withdrawal 

usage is lower than loan usage among all salary quintiles. In 2014, the second salary quintile 

had the highest usage rate at 5.5%, which is half percent drop from the previous year. When 

examining tenure cohorts, there is also a stair-step pattern with usage steadily increasing with 

tenure until it drops off for those with 21 plus years. Among other cohorts, more females (4.5%) 

16 | Page
than males (2.8%) received hardship withdrawals in 2014, while blacks (7.3%) received more 

hardship withdrawals than other racial and ethnic cohorts.

Figure 13

As with loan usage, hardship withdrawal usage among those who were auto-enrolled is 

miniscule. (Note: Chart does not include 2010 data because automatic enrollment was not 

introduced until August of that year.) However, hardship withdrawal usage is highest (4.6%) 

among those participants who opted out of automatic enrollment, again suggesting that this is 

population that could not afford to contribute. It is important to note that since the 

implementation of automatic enrollment, the opt-out rate has not exceeded 4% of participants. 

Defined contribution surveys indicate that 68% of plans have an opt-out rate of 5% or less.2

Figure 14

2

Deloitte, Annual Defined Contribution Benchmarking Survey – Ease of Use Drives Engagement in Saving for 

Retirement, 2015 Edition

17 | Page

 
Summary

The analysis reveals an improvement in the FERS participation with a five-year high of 89.9% 

by the end of 2014. However, the average contribution deferral rate dropped to 8.1% - the 

lowest rate in this reporting period. Automatic enrollment was a contributing factor to both of 

these observations. 

Automatic enrollment continues to improve participation among the shortest-tenured 

participants. Participants with less than two-years of tenure now participate at a rate of 98.4% –

the highest rate of participation among all tenure bands. When examining participation through 

salary, gender, race/ethnicity, and education filters, virtually every cohort experienced an 

improved participation rate in 2014.

The analysis also revealed that the vast majority of auto-enrolled participants have “engaged” 

with 62.3% making deferral changes. Nevertheless, the only participant cohort that was hired 

entirely after the introduction of automatic enrollment in August 2010 has experienced a dip in 

deferral rates, down to 3.7% in 2014. This lowest tenured cohort is the only cohort not 

contributing at a level which results in receiving the full Agency match. While deferral rates 

continue to aggregate in the 5-6% range, with 30.5% of TSP contributors falling in this range, 

nearly 75% of FERS participants are estimated to be receiving the full match. Participants are 

gradually increasing their contributions to Roth TSP with average Roth deferral rates growing by 

a half percent to 4.9% in 2014.

Participants aged 29 and under continue to have a disproportionate percentage (41.7%) of their 

account balances in the G Fund although this is an improvement from 2013 when 43.6% of their 

balances where in the G Fund. However, this group also has the highest utilization of the L 

Funds (29.2%). We further note that L Fund usage is highest among the 2-5 year tenure cohort 

(26.8%) and the 6-10 years group (27.39%). The majority of these cohorts were hired after the 

implementation of the L Funds in August 2005. Overall, participants are investing in the L Fund 

in a manner appropriate for their age cohort.

Loan usage rates are evenly distributed among salary quintiles and between males and 

females. However, noticeable differences were identified among educational and racial/ethnic 

cohorts. Among age cohorts, the 30-39 and 40-49 age cohorts have the highest loan usage 

rate at approximately 11% each although loan usage dropped among all age cohorts in 2014. 

The age 40-49 cohort also had the highest hardship withdrawal usage, with 4% to 5% of 

participants in this cohort receiving a hardship withdrawal in each year of this reporting period. 

It was also found that Blacks utilize loans and hardship withdrawals significantly more than 

white and Asian participants. Participants who were auto-enrolled and continue to contribute 

have loan and hardship usage withdrawal rate significantly lower than those who elected to 

contribute to the Plan. However, those participants who opted out of automatic enrollment had 

the highest rate of hardship withdrawal usage, with 4.6% of these participants taking a 

withdrawal.

18 | Page
Appendix A

Summary of FERS Demographic Statistics

All FERS Fulltime 

2010 2011 2012 2013 2014

Participant Count 2,115,082 2,155,342 2,136,325 2,157,260 2,164,712 

Age 

<=29 10.5% 7.3% 5.2% 4.0% 3.1%

30-39 21.3% 19.8% 18.4% 18.1% 17.2%

40-49 34.3% 34.5% 33.8% 32.8% 31.5%

50-59 26.5% 29.7% 32.5% 34.2% 36.1%

60-69 7.0% 8.2% 9.5% 10.2% 11.4%

70+ 0.4% 0.5% 0.6% 0.6% 0.8%

Tenure 

< 2 years 14.9% 6.4% 1.2% 1.2% 1.1%

2-5 years 24.3% 28.7% 26.6% 20.6% 13.8%

6-10 years 19.6% 19.8% 21.8% 23.7% 27.1%

11-20 years 23.5% 24.8% 27.6% 31.0% 32.5%

21+ years 17.8% 20.2% 22.9% 23.6% 25.5%

Gender

Female 41.9% 41.7% 41.7% 41.7% 41.7%

Male 58.1% 58.3% 58.3% 58.3% 58.3%

Race and Ethnicity

American Indian or Native Alaskan 1.4% 1.4% 1.4% 1.3% 1.3%

Asian or Other Pacific Islander 4.7% 4.8% 4.9% 5.0% 5.1%

Black or African American 13.9% 13.9% 14.0% 14.3% 14.3%

White 52.3% 52.4% 52.4% 52.5% 52.1%

Hispanic Or Latino 6.3% 6.4% 6.5% 6.6% 6.6%

Multi-Racial 0.7% 0.9% 1.0% 1.1% 1.2%

Unknown 20.7% 20.2% 19.8% 19.1% 19.3%

Education

Without High School Diploma 0.4% 0.4% 0.4% 0.4% 0.4%

High School Diploma 21.5% 21.4% 20.8% 20.6% 20.5%

Some College or Training 19.2% 19.1% 19.1% 19.0% 18.7%

Bachelor's Degree 20.9% 21.2% 21.4% 21.7% 21.7%

Post-Bachelor's Education/Degree 17.2% 17.8% 18.4% 19.2% 19.4%

Unknown 20.7% 20.1% 19.8% 19.1% 19.4%

Average Age 48.6 47.9 47.4 46.7 47.0 

Average Tenure 12.1 11.9 12.4 12.7 13.0 

Average Salary $70,065 $71,425 $72,472 $73,892 $74,695

Average TSP Balance $77,617 $81,924 $93,445 $109,631 $117,946

19 | Page
Appendix B

Summary of FERS Demographic Statistics

FERS Fulltime Contributing 

2010 2011 2012 2013 2014

Participant Count 1,946,863 2,003,804 2,001,235 2,026,044 

 

2,041,875 

Age 

<=29 8.7% 8.4% 7.6% 7.0% 6.7%

30-39 19.8% 20.0% 20.1% 20.7% 21.0%

40-49 32.5% 31.4% 30.1% 28.8% 27.6%

50-59 29.7% 30.6% 31.8% 32.6% 33.3%

60-69 8.7% 9.1% 9.8% 10.2% 10.8%

70+ 0.5% 0.5% 0.6% 0.6% 0.7%

Tenure 

< 2 years 10.9% 11.6% 9.0% 8.8% 8.6%

2-5 years 19.5% 21.0% 22.1% 21.3% 19.5%

6-10 years 19.7% 19.6% 20.0% 20.1% 21.6%

11-20 years 26.3% 24.7% 24.9% 26.3% 26.9%

21+ years 23.6% 23.1% 24.0% 23.4% 23.4%

Gender

Female 42.9% 42.5% 42.6% 42.6% 42.4%

Male 57.1% 57.5% 57.4% 57.4% 58.3%

Race and Ethnicity

American Indian or Native Alaskan 1.4% 1.4% 1.4% 1.4% 1.3%

Asian or Other Pacific Islander 5.0% 5.1% 5.2% 5.3% 5.4%

Black or African American 12.5% 12.8% 12.9% 13.3% 13.2%

White 53.3% 53.7% 53.9% 54.3% 53.7%

Hispanic Or Latino 6.1% 6.4% 6.5% 6.6% 6.6%

Multi-Racial 0.7% 0.9% 1.0% 1.2% 1.3%

Unknown 21.1% 19.8% 19.1% 17.9% 18.5%

Education

Without High School Diploma 0.4% 0.4% 0.4% 0.3% 0.3%

High School Diploma 20.0% 20.2% 19.9% 20.0% 19.8%

Some College or Training 18.4% 18.6% 18.6% 18.6% 18.2%

Bachelor's Degree 21.6% 21.9% 22.2% 22.5% 22.4%

Post-Bachelor's Education/Degree 18.5% 19.1% 19.8% 20.6% 20.7%

Unknown 21.1% 19.8% 19.1% 17.9% 18.5%

Average Age 48.7 47.9 47.4 46.6 46.9

Average Tenure 12.1 11.8 12.2 12.4 12.8

Average Salary $72,107 $73,143 $74,055 $75,374 $76,073

Average TSP Balance $88,299 $91,012 $102,937 $120,163 $128,457

20 | Page
Appendix C

Summary of FERS Demographic Statistics

FERS Fulltime Non-contributing 

2010 2011 2012 2013 2014

Participant Count 323,529 279,948 259,894 249,699 238,470

Age 

<=29 12.1% 8.1% 5.8% 4.5% 3.5%

30-39 21.6% 20.0% 18.7% 18.3% 17.4%

40-49 33.0% 33.9% 33.3% 32.2% 31.1%

50-59 25.5% 29.0% 31.8% 33.6% 35.5%

60-69 7.2% 8.3% 9.6% 10.5% 11.6%

70+ 0.6% 0.7% 0.8% 0.9% 1.0%

Tenure 

< 2 years 16.6% 6.9% 1.4% 1.4% 1.4%

2-5 years 26.8% 30.4% 28.1% 21.9% 14.7%

6-10 years 18.9% 19.9% 22.1% 24.2% 27.7%

11-20 years 21.8% 23.9% 26.8% 30.2% 31.9%

21+ years 15.9% 19.0% 21.6% 22.3% 24.4%

Gender

Female 44.3% 43.3% 43.4% 43.6% 43.6%

Male 55.7% 56.7% 56.6% 56.4% 56.4%

Race and Ethnicity

American Indian or Native Alaskan 2.0% 2.0% 2.0% 2.0% 2.0%

Asian or Other Pacific Islander 2.9% 2.7% 2.5% 2.5% 2.4%

Black or African American 20.7% 20.7% 21.3% 21.9% 22.3%

White 42.9% 40.3% 38.6% 38.4% 37.6%

Hispanic Or Latino 6.9% 6.6% 6.5% 6.8% 6.8%

Multi-Racial 0.9% 0.9% 0.9% 1.0% 1.0%

Unknown 23.6% 26.8% 28.3% 27.4% 28.0%

Education

Without High School Diploma 0.8% 0.8% 0.8% 0.8% 0.8%

High School Diploma 32.1% 30.5% 29.2% 29.8% 29.5%

Some College or Training 22.1% 21.6% 21.5% 21.6% 21.4%

Bachelor's Degree 12.4% 12.0% 11.8% 12.0% 11.9%

Post-Bachelor's Education/Degree 8.8% 8.4% 8.3% 8.3% 8.3%

Unknown 23.8% 26.8% 28.3% 27.4% 28.0%

Average Age 47.4 47.8 47.9 47.5 48.2

Average Tenure 9.6 10.8 12.2 13.0 14.3

Average Salary $56,461 $59,248 $60,574 $61,394 $63,616

Average TSP Balance $13,333 $16,877 $20,355 $24,182 $27,949

21 | Page
Appendix D

FERS Salary Quintiles

FERS Salary Quintiles

Year Count 

Salary

Number of 

Participants

Quintile 1 

Lowest Paid

Quintile 2 

Lower Paid

Quintile 3 

Mid-Range

Quintile 4 

Higher Paid

Quintile 5 

Highest Paid

Bottom Top Bottom Top Bottom Top Bottom Top Bottom Top

2014 EE Count 2,156,644 1 431,329 431,330 862,658 862,659 1,293,987 1,293,988 1,725,316 1,725,317 2,156,644

Salary $10,000 $50,932 $50,932 58446 58446 $74,560 $74,560 $98,916 $98,916 $230,700

2013 Count 2,150,861 1 430,172 430,173 860,344 860,345 1,290,516 1,290,517 1,720,688 1,720,689 2,150,560

Salary $10,000 $50,611 $50,611 $57,219 $57,219 $73,420 $73,420 $97,701 $97,701 $230,700 

2012 Count 2,130,944 1 426,189 426,190 852,378 852,378 1,278,567 1,278,568 1,704,756 1,704,757 2,130,944

Salary $10,000 $48,775 $49,775 $56,508 $56,508 $71,201 $71,201 $95,459 $95,459 $230,700 

2011 Count 2,150,461 1 430,093 430,094 860,185 860,186 1,290,277 1,290,278 1,720,369 1,720,370 2,150,461

Salary $10,000 $49,075 $49,075 $56,508 $56,508 $70,062 $70,062 $94,551 $94,551 $230,700 

2010 Count 2,110,401 1 422,081 422,082 844,161 844,162 1,266,241 1,266,242 1,688,321 1,688,322 2,110,400

Salary $10,000 $47,900 $47,900 $55,530 $55,530 $67,762 $67,762 $92,431 $92,431 $230,700 

22 | Page