Analysis of Participant Behavior

and Demographics 

for 2009 – 2013

Thrift Savings Plan
1 | Page

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 2013 data is similar to analyses of data conducted 

in previous years. 

As with the 2012 report, the 2013 analysis focuses 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 in 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 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 three major plan design changes. The 

implementation of immediate contributions occurred in June 2009, automatic enrollment began in August 

2010, and the acceptance of Roth contributions commenced in May 2012. The impact of these changes on 

participant behavior will be discussed in this analysis. It should be noted that this is the first report to delve 

into participant behaviors associated with Roth contributions, as there was not sufficient experience with Roth 

to include any observations in the 2012 report.

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 

its 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. 
2 | Page

Not all records for participants on the TSP extract can be matched with OPM data. In 2013, a total of nearly 

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 CSRS 

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

of full-time 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 five-year timeframe 

ending December 31, 2013 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 the following participant behaviors: 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 89.6% by the end of 2013. Figure 1 illustrates the steady 

improvement in the participation rate since 2009 when participation was down due to the lingering impact 

of the 2008 economic downturn and the implementation of immediate contributions in June 2009. Prior 

to 2009, new employees had to wait a period of six to twelve months before becoming eligible to receive 

agency 1% automatic and matching contributions. In June 2009, employees became eligible to receive these 

contributions immediately upon hire. This change increased the denominator (the number of employees who 

were eligible to participate in the TSP) but did not have a similar impact on the numerator (the number of 

individuals deferring into the Plan).
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Figure 1 FERS Participation RatesAge

The economic rebound and automatic enrollment contributed significantly to the improvement in 

participation rates in 2010—the same year that automatic enrollment was instituted—with an almost 2% 

gain. Gains in participation of nearly 1% followed in 2011 and 2012, with a slightly lower increase in 2013. 

Automatic enrollment provides that new employees automatically have 3% of their salary deferred into the 

G Fund unless there is an active election not to participate in the Plan. Automatic enrollment has meant that 

not only do participants immediately receive the Agency 1% contribution, but they also start deferrals and 

receive matching contributions immediately upon hire. 

When examining participation by tenure bands, the impact of 

automatic enrollment on participation becomes even more 

evident. Historically, participation has been lowest among 

the newest employees, those with two years of employment 

or less, 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 

shortest-tenured was the lowest (70.0%) in 2009 while the longest-tenured participated at a rate of 90.0%. By 

2013, those with fewer than two years of tenure participated at a rate of 98.3% - the highest rate of participation 

among all tenure bands and almost 9% higher than the band with second highest participation rate.

82%

83%

84%

85%

86%

87%

88%

89%

90%

2009 2010 2011 2012 2013

Participation Rate

After automatic enrollment, 

those with less than two-years 

of tenure now have the highest 

rate of participation at 98.3%.
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FERS Participation Rates By Tenure

Automatic enrollment seems to have had varying effects on other demographic cohorts. In 2009, the 

participation rate for the under-29 cohort was the lowest among all age cohorts at 78%, while the 60-69 cohort 

had the highest participation at 88.4%. By 2013, the youngest cohort had surpassed all other cohorts and had 

the highest rate of participation: 93.3%. In 2009 and 2010, participation rates among the lowest-paid quintile 

trailed that of the highest paid by approximately 20%. By 2013, the difference between the two quintiles was 

reduced to less than 12%. Among race and ethnicity cohorts, blacks and multiracial participants showed the 

greatest increase in participation. Despite their increased participation, blacks still rank lowest among racial/

ethnic groups, well below the group with the highest rate (Asians, 95%). 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 

on page 5.

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2009 2010 2011 2012 2013

Less Than 2

2 - 5 Years

6 - 10 Years

11 - 20 Years

21 Plus Years

Participation Rate

Figure 2
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Annual FERS Participation Rates by Demographic Cohorts

2009 2010 2011 2012 2013

Age

< = 29

30–39

78.0%

83.3%

83.9%

85.7%

89.1%

88.2%

91.7%

89.5%

93.3%

90.5%

40–49

50–59

84.9%

87.1%

86.1%

88.0%

87.1%

88.5%

87.6%

88.7%

88.0%

88.9%

60–69

70+

88.4%

86.6%

89.0%

87.1%

89.1%

87.3%

89.1%

87.5%

89.1%

87.8%

Tenure

Less than 2 years

2–5 years

70.0%

81.9%

82.1%

83.3%

92.6%

84.2%

98.2%

86.7%

98.3%

89.5%

6–10 years 85.9% 86.8% 88.0% 87.9% 87.6%

11–20 years

21 + years

88.1%

90.0%

88.0%

89.9%

88.2%

89.7%

87.8%

89.5%

87.7%

89.5%

Salary Quintile

Q1 Lowest Paid

Q2 Lower Paid

71.1%

82.3%

76.2%

83.4%

80.6%

83.8%

82.7%

83.6%

84.3%

83.8%

Q3 Mid-Range 86.5% 87.3% 88.3% 89.0% 89.4%

Q4 Higher Paid

Q5 Highest Paid

89.9%

94.4%

91.3%

95.1%

92.4%

95.4%

92.8%

95.6%

93.1%

95.7%

Gender

Female

Male

84.7%

85.0%

86.6%

86.7%

88.0%

88.2%

88.6%

88.9%

89.1%

89.3%

Race and Ethnicity

American Indian or Native Alaskan 79.3% 82.0% 84.2% 85.3% 85.7%

Asian or Other Pacific Islander

Black or African American

90.3%

76.7%

92.2%

79.6%

93.7%

81.9%

94.5%

82.6%

95.0%

83.3%

White

Hispanic or Latino

87.0%

84.0%

89.1%

86.0%

90.8%

88.0%

91.7%

88.9%

92.3%

89.4%

Multi-Racial

Unknown

77.7%

84.6%

84.1%

84.6%

88.2%

84.2%

90.0%

83.9%

91.0%

84.1%

Education

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

High School Diploma

Some College or Training

78.1%

82.4%

78.1%

82.4%

83.2%

86.3%

84.5%

87.1%

85.0%

87.7%

Bachelor’s Degree

Post-Bachelor’s /Degree

90.4%

91.5%

90.4%

91.6%

93.1%

94.6%

93.7%

95.1%

94.0%

95.5%

Table 1
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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 auto-enrolled participants are remaining in the Plan, and 

of this population, 63.2% are actively making deferral rate changes, while others are showing signs of life by 

making interfund transfers or other transactions. As shown in Figure 3, those who remain in the auto-enrolled 

status (no deferral change or investment activity) are mostly in the lowest salary quintiles.

FERS Automatic Enrollment Status by Salary Quintile

(as of 12/31/2013)Age

Contribution Deferral Rates

The FERS contribution deferral rate dropped to 8.2% in 2013 after experiencing a one percent increase in 

2012 as shown in Figure 4. (The FERS deferral rate includes Roth, traditional and catch-up contributions). 

While 63.2% of automatically-enrolled participants change their deferrals from the 3% default rate, automatic 

enrollment, nevertheless, appears to have had a dampening effect on deferral rates as rates have consistently 

been below the 2009 high.

Figure 4 FERS Deferral Rates

Figure 3Percent of Participants

Deferral Rate

7.6%

8.0%

8.4%

8.8%

9.2%

9.6%

10.0%

2009 2010 2011 2012 2013

Auto-Enrolled

AE/Subsequent Activity

AE-Deferral Change

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Q1 Lowest Paid Q2 Lower Paid Q3 Mid-Range Q4 Higher Paid Q5 Highest Paid
7 | Page

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 30.4% of TSP 

contributors being in this range in 2013. Of significant note, 25.5% of participants are not receiving the full 

matching contribution as they are contributing less than 5%. 

Distribution of FERS Deferral Rates

Age

As expected, the lowest-paid participants are deferring the least, 4.6% less than the highest paid. See Table 2. 

However, all salary quintiles had slight dips in 2013 from their 2012 deferral rates. 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 5.8%, significantly lag behind 

Asians at 9.8%, whites at 8.0%, and Latinos at 7.4%.

Participants with less than

two years of tenure had an 

average deferral rate of 3.8% 

in 2013. In 2009, their deferral

rate was 4.2%. They are the 

only tenure cohort that is not,

on average, receiving the full

match.

Percent of Participants

Figure 5

0%

5%

10%

15%

20%

25%

30%

35%

2009 2010 2011 2012 2013

1 - 2%

3 - 4%

5 - 6%

7 - 8%

9 - 10%

11 - 12%

13 - 14%

15%

< 15%

Deferral Rates
8 | Page

Annual FERS Deferral Rates by Demographic Cohorts

2009 2010 2011 2012 2013

Age

< = 29

30–39

4.9%

6.4%

4.7%

6.1%

5.0%

6.2%

5.2%

6.3%

4.9%

6.1%

40–49

50–59

7.7%

9.4%

7.4%

9.1%

7.4%

9.2%

7.4%

9.2%

7.1%

9.0%

60–69

70+

10.8%

12.2%

10.5%

11.9%

10.5%

11.8%

10.5%

11.9%

10.3%

11.6%

Tenure

Less than 2 years

2–5 years

4.2%

6.7%

3.9%

6.4%

4.2%

6.6%

4.1%

6.6%

3.8%

6.3%

6–10 years 8.0% 7.8% 7.9% 7.9% 7.6%

11–20 years

21 + years

8.8%

9.5%

8.6%

9.4%

8.8%

9.4%

8.7%

9.5%

8.6%

9.4%

Salary Quintile

Q1 Lowest Paid

Q2 Lower Paid

5.4%

7.3%

5.1%

7.3%

5.2%

7.5%

5.4%

7.5%

5.1%

7.4%

Q3 Mid-Range 7.9% 7.6% 7.5% 7.5% 7.3%

Q4 Higher Paid

Q5 Highest Paid

8.7%

9.9%

8.4%

9.7%

8.7%

9.7%

8.8%

9.8%

8.6%

9.7%

Gender

Female

Male

7.6%

8.3%

7.4%

8.0%

7.4%

8.1%

7.5%

8.1%

7.4%

8.0%

Race and Ethnicity

American Indian or Native Alaskan 6.5% 6.2% 6.2% 6.2% 6.1%

Asian or Other Pacific Islander

Black or African American

10.0%

5.9%

9.6%

5.7%

9.7%

5.8%

9.9%

5.9%

9.8%

5.8%

White

Hispanic or Latino

8.3%

7.5%

8.0%

7.3%

8.1%

7.5%

8.2%

7.6%

8.0%

7.4%

Multi-Racial

Unknown

6.4%

8.1%

6.5%

8.1%

6.7%

8.1%

6.9%

8.0%

6.7%

7.9%

Education

Without High School Diploma 6.0% 5.8% 5.9% 5.9% 5.7%

High School Diploma

Some College or Training

6.9%

7.4%

6.6%

7.1%

6.7%

7.1%

6.8%

7.2%

6.5%

6.9%

Bachelor’s Degree

Post-Bachelor’s /Degree

8.6%

9.1%

8.2%

8.7%

8.4%

8.8%

8.5%

8.9%

8.3%

8.8%

Table 2
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Investment Allocation and Inactivity 

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 4.4% 

as opposed to the average traditional deferral of 7.7%. (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.) As with the traditional TSP, Roth deferral rates 

are highest among older participants, as well as the most-tenured 

and highest-paid. 

FERS Traditional and Roth Deferral 

Rates by Demographic Cohorts

Traditional Roth

Age

< = 29

30–39

4.6%

5.8%

3.5%

3.5%

40–49

50–59

7.0%

8.4%

3.5%

4.2%

60–69

70+

9.5%

10.6%

5.6%

6.1%

Tenure

Less than 2 years

2–5 years

3.4%

6.0%

3.1%

3.8%

6–10 years 7.2% 3.8%

11–20 years

21 + years

8.2%

8.9%

4.0%

4.2%

Salary Quintile

Q1 Lowest Paid

Q2 Lower Paid

5.0%

7.2%

3.0%

3.7%

Q3 Mid-Range 7.0% 3.7%

Q4 Higher Paid

Q5 Highest Paid

8.2%

9.1%

4.1%

4.4%

Table 3

Traditional

7.7%

Roth

4.4%

2013 FERS Deferral Rates
10 | Page

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 incomeproducing 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 (43.6%) of their accounts in the 

G Fund, probably as a result of the default investment option being

the G Fund.

FERS Investment Allocation By Age

(as of 12/31/2013)

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

allocation to the G Fund, approximately 57%. 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. Further, 

the lowest-paid participants have approximately 55% allocated to the G Fund as compared to the highest paid 

who allocated only 27.5% to the G Fund. Females had a slightly higher allocation to the G Fund at 36.4% as 

compared to males at 32.8%. Additionally, blacks allocated 43.3% to the G Fund, well above the allocation 

levels of Asians at 32% and whites at 30%. See Table 4.

The two youngest age cohorts had the highest level of usage of the Lifecycle (L) funds, at 28.7% and 26.7%, 

while the two oldest age cohorts had L Fund allocations of 12.7% and 8.4%. We also want to note that L Fund 

usage is highest among the 2-5-years tenure cohort (26.4%) and the 6-10-years group (24.9%). The majority 

of the participants in these two cohorts began Federal service after the implementation of the L Funds in 2005. 

Use of the L Funds drops off somewhat with the less-than-two-years cohort (19.4%), where the impact of autoenrollment and inertia are likely factors. Males and females had nearly identical allocations to the L Funds at 

just under 17%. See Table 4. Percent Allocated

Figure 6

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

<= 29 30 - 39 40 - 49 50 - 59 60 - 69 70+

G Fund

F Fund

C Fund

S Fund

I Fund

Lifecycle Funds

The youngest participants, who

have the longest time horizon 

to reap the benefits of compounding returns, have 43.6%

their assets invested in the 

G Fund.
11 | Page

Table 4

Annual Investment Allocations by Demographic Cohorts

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

Age

< = 29

30–39

43.6%

29.1%

1.7%

2.8%

10.4%

19.0%

9.5%

13.2%

6.1%

9.1%

28.7%

26.7%

40–49

50–59

27.1%

35.9%

4.3%

5.2%

30.9%

27.5%

12.8%

10.5%

7.5%

5.6%

17.5%

15.3%

60–69

70+

43.7%

48.4%

6.1%

6.2%

24.0%

24.8%

8.8%

7.9%

4.7%

4.2%

12.7%

8.4%

Tenure

Less than 2 years

2–5 years

57.2%

43.9%

2.3%

3.0%

10.2%

11.6%

6.9%

9.6%

3.9%

5.6%

19.4%

26.4%

6–10 years 35.2% 3.4% 15.2% 12.7% 8.6% 24.9%

11–20 years

21 + years

29.2%

35.5%

5.3%

5.1%

30.1%

29.7%

12.3%

10.2%

7.3%

5.3%

15.8%

14.1%

Salary Quintile

Q1 Lowest Paid

Q2 Lower Paid

54.5%

45.3%

3.6%

5.0%

16.8%

25.5%

7.5%

8.3%

4.9%

4.8%

12.7%

11.0%

Q3 Mid-Range 40.3% 4.6% 23.0% 10.1% 6.0% 15.9%

Q4 Higher Paid

Q5 Highest Paid

33.2%

27.5%

4.5%

5.1%

24.2%

30.7%

12.1%

12.1%

7.0%

6.7%

19.0%

17.9%

Gender

Female

Male

36.4%

32.8%

5.3%

4.6%

26.6%

27.2%

9.4%

12.1%

5.7%

6.7%

16.6%

16.7%

Race and Ethnicity

American Indian or Native Alaskan 41.5% 4.4% 24.0% 10.2% 5.6% 14.3%

Asian or Other Pacific Islander

Black or African American

32.0%

43.3%

4.7%

4.7%

26.7%

23.7%

13.4%

9.5%

7.8%

5.9%

15.5%

12.9%

White

Hispanic or Latino

30.0%

36.1%

4.8%

4.0%

27.9%

24.3%

11.6%

12.4%

6.6%

7.3%

19.1%

15.8%

Multi-Racial

Unknown

33.6%

43.7%

4.3%

5.3%

22.0%

26.9%

12.7%

8.7%

7.5%

4.8%

19.8%

10.5%

Education

Without High School Diploma 51.4% 4.0% 21.9% 7.8% 4.7% 10.3%

High School Diploma

Some College or Training

41.1%

39.4%

3.9%

4.3%

21.6%

23.4%

10.7%

11.0%

6.5%

6.2%

16.0%

15.8%

Bachelor’s Degree

Post-Bachelor’s /Degree

29.3%

27.6%

4.6%

5.4%

28.7%

29.3%

12.3%

11.6%

6.8%

6/8%

18.3%

19.4%
12 | Page

Of the participants using 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 L 2040 and L 2050 Funds. Participants who would 

likely retire between 2025 and 2035 (the 40-49 age group) were in L 2030 and L 2040 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.

FERS Lifecycle Investment Allocation By Age

(as of 12/31/2013)

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 – 6.6% for those 

age 29 and under and 7.4% for those age 30 to 39. While the percentage 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 (59.7%) of the under-29 cohort is invested solely in the G Fund. See Figure 8.

FERS 100% Allocation in One Fund by Age

(as of 12/31/2013)

Figure 7

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

<= 29 30 - 39 40 - 49 50 - 59 60 - 69 70+

Percent Allocated

Figure 8

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

<= 29 30 - 39 40 - 49 50 - 59 60 - 69 70+

100% G Fund

100% F Fund

100% C Fund

100% S Fund

100% I Fund

100% in One L Fund

Other Allocations

Percent of Participants

L 2040 Fund

L 2030 Fund

L 2020 Fund

L Income Fund

L 2050 Fund
13 | Page

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 2013. As illustrated in the chart, the majority of participants do not actively manage their TSP 

accounts. While the level of inactivity did decline from 2012 to 2013, no age cohort had less than 80% inactive 

participants. Among all demographic cohorts, only the following had less than 80% inactive participants: 

highest paid (75.1%); tenured 21 or more years (76.6%), Asians (78.9%) and bachelor’s degree (79.6%). 

Figure 9 FERS Investment Inactivity by Age

65%

70%

75%

80%

85%

90%

95%

100%

<= 29 30 - 39 40 - 49 50 - 59 60 - 69 70+

2009

2010

2011

2012

2013

Percent Inactive
14 | Page

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 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 12% of 

the participants in each cohort receiving a loan in 2013. All age groups experienced an increase in loan usage 

in 2013. However, the increase was less than one-half of one percent for all age cohorts. See Figure 10 for the 

percentage of participants who received a loan during each year in the reporting period

FERS Loan Usage Age

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 7.8% in 2013. Males and females also had 

similar rates of loan usage with 10.0% of males and10.8% of females receiving loans in 2013. However, there 

is noticeable difference in loan usage among educational and racial/ethnic cohorts. Loan usage drops off with 

an increased level of education. Only 6.9% of participants with post-bachelor’s education received a loan in 

2013 as compared to nearly double that amount among those without a high school diploma (13.6%). Figure 

11 shows a similar disparity in loan usage among racial and ethnic cohorts with whites and Asians having 

significantly lower loan usage than other groups. 

FERS Loan Usage by Ethnicity and Race

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

2009 2010 2011 2012 2013

Figure 10

< = 29

30 - 39

40 - 40

50 - 59

60 - 69

Percent with Loan

70+

Figure 11

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

2009 2010 2011 2012 2013

American Indian or Native Alaskan

Asian or Other Pacific Islander

Black or African American

White

Hispanic or Latino

Multi-Racial

Unknown
15 | Page

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 591⁄2, 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 more than 4% of participants 

in this cohort receiving a hardship withdrawal during the first four years in this reporting period. In 2013, more 

than 5% of the age 40- 49 cohort received a hardship withdrawal. See Figure 12. The three youngest cohorts, as 

well as the 50-59 cohort, experienced a slight increase in withdrawal usage in 2013 over the previous year.

FERS Hardship Withdrawal Usage by Age

Age

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. The second quintile had the highest usage rate at 6.2%. Among other cohorts, more females (5.0%) 

than males (3.2%) received hardship withdrawals in 2013, while blacks (8.1%) received more hardship 

withdrawals than other racial and ethnic cohorts. 

Figure 12

0%

1%

2%

3%

4%

5%

6%

All <= 29 30 - 39 40 - 49 50 - 59 60 - 69

2008

2009

2010

2011

2012

2013
16 | Page

FERS Hardship Withdrawal Usage by Salary Quintile

Summary

The analysis reveals an improvement in the FERS participation with a five-year high of 89.6% by the end 

of 2013. However, the contribution deferral rate dropped to 8.2%, the lowest rate in this reporting period. 

Automatic enrollment contributed to both changes. 

Automatic enrollment helped produce an 18% increase in participation among the shortest-tenured 

participants. Participants with less than two-years of tenure now participate at a rate of 98.3% - the highest 

rate of participation among all tenure bands. In 2013, participation rates increased in virtually every cohort of 

salary, gender, race/ethnicity, and education.

The analysis also revealed that the vast majority of auto-enrolled participants have “engaged,” with 63.2% 

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 3.8% in 2013. This 

lowest tenured cohort is the only cohort not contributing at a level which results in receiving the full Agency 

match. Deferral rates continue to aggregate in the 5-6% range, with 30.4% of TSP contributors falling in this 

range, and nearly 75% of FERS participants are estimated to be receiving the full match.

Participants aged 29 and under have a disproportionate percentage (43.6%) of their account balances in the 

G Fund. However, this group also has the highest utilization of the L Funds (28.7%). We further note that 

L Fund usage is highest among the 2-5-year tenure cohort (26.4%) and the 6-10-year group (24.9%). The 

majority of these cohorts were hired after the implementation of the L Funds. Overall, participants are investing 

in the L Funds 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 12% each. The 40-49 cohort 

also had the highest hardship withdrawal usage, with more than 4% of participants in this cohort receiving a 

hardship withdrawal in each year of this reporting period. It was also found that blacks use loans and hardship 

withdrawals significantly more than white and Asian participants.

Figure 13 Percent with Hardship

0%

1%

2%

3%

4%

5%

6%

7%

2009 2010 2011 2012 2013

Q1 Lowest Paid

Q2 Lower Paid

Q3 Mid-Range

Q4 Higher Paid

Q5 Highest Paid
17 | Page

Appendix A

Summary of FERS Demographic Statistics

All FERS Full-time

2009 2010 2011 2012 2013

Participant Count

Age

2,030,386 2,115,082 2,155,342 2,136,325 2,157,260

< = 29

30–39

2.0%

3.4%

1.4%

2.8%

0.9%

2.3%

0.6%

2.1%

0.4%

1.9%

40–49

50–59

5.2%

3.7%

4.6%

3.5%

4.1%

3.5%

3.8%

3.6%

3.5%

3.7%

60–69

70+

0.9%

0.1%

0.9%

0.1%

1.0%

0.1%

1.1%

0.1%

1.1%

0.1%

Tenure

Less than 2 years

2–5 years

3.5%

3.3%

2.0%

3.2%

0.8%

3.4%

0.1%

3.0%

0.1%

2.2%

6–10 years 2.7% 2.6% 2.4% 2.4% 2.5%

11–20 years

21 + years

3.3%

2.3%

3.1%

2.4%

2.9%

2.4%

3.1%

2.6%

3.3%

2.5%

Gender

Female

Male

41.9%

58.1%

41.9%

58.1%

41.7%

58.3%

41.7%

58.3%

41.7%

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

Black or African American

4.6%

13.6%

4.7%

13.9%

4.8%

13.9%

4.9%

14.0%

5.0%

14.3%

White

Hispanic or Latino

51.5%

6.3%

52.3%

6.3%

52.4%

6.4%

52.4%

6.5%

52.5%

6.6%

Multi-Racial

Unknown

0.5%

22.1%

0.7%

20.7%

0.9%

20.7%

1.0%

19.8%

1.1%

19.1%

Education

Without High School Diploma 0.5% 0.4% 0.4% 0.4% 0.4%

High School Diploma

Some College or Training

21.3%

19.2%

21.5%

19.2%

21.4%

19.1%

20.8%

19.1%

20.6%

19.0%

Bachelor’s Degree

Post-Bachelor’s/Degree

20.1%

16.0%

20.9%

17.2%

21.2%

17.8%

21.4%

18.4%

21.7%

19.2%

Unknown 22.8% 20.7% 20.1% 19.8% 19.1%

Average Age 49.6 48.6 47.9 47.4 46.7

Average Tenure 12.0 12.1 11.9 12.4 12.7

Average Salary $67,645 $70,065 $71,425 $72,472 $73,892

Average TSP Balance $68,435 $77,617 $81,924 $93,445 $109,631
18 | Page

Appendix B

Summary of FERS Demographic Statistics

FERS Full-time Contributing

2009 2010 2011 2012 2013

Participant Count

Age

1,830,700 1,946,863 2,003,804 2,001,235 2,026,044

< = 29

30–39

8%

20%

9%

20%

8%

20%

8%

20%

7%

21%

40–49

50–59

34%

29%

32%

30%

31%

31%

30%

32%

29%

33%

60–69

70+

8%

0%

9%

0%

9%

1%

10%

1%

10%

1%

Tenure

Less than 2 years

2–5 years

10%

18%

11%

19%

12%

21%

9%

22%

9%

21%

6–10 years 20% 20% 20% 20% 20%

11–20 years

21 + years

29%

23%

26%

24%

25%

23%

25%

24%

26%

23%

Gender

Female

Male

42.89%

57.11%

42.90%

57.10%

42.54%

57.46%

42.56%

57.43%

42.60%

57.39%

Race and Ethnicity

American Indian or Native Alaskan 1% 1% 1% 1% 1%

Asian or Other Pacific Islander

Black or African American

5%

12%

5%

12%

5%

13%

5%

13%

5%

13%

White

Hispanic or Latino

52%

6%

53%

6%

54%

6%

54%

6%

54%

7%

Multi-Racial

Unknown

0%

23%

1%

21%

1%

20%

1%

19%

1%

18%

Education

Without High School Diploma 0% 0% 0% 0% 0%

High School Diploma

Some College or Training

20%

18%

20%

18%

20%

19%

20%

19%

20%

19%

Bachelor’s Degree

Post-Bachelor’s/Degree

21%

17%

22%

18%

22%

19%

22%

20%

23%

21%

Unknown 24% 21% 20% 19% 18%

Average Age 49.6 48.7 47.9 47.4 46.6

Average Tenure 12.3 12.1 11.8 12.2 12.4

Average Salary $69,986 $72,107 $73,143 $74,055 $75,374

Average TSP Balance $79,653 $88,299 $91,012 $102,937 $120,163
19 | Page

Appendix C

Summary of FERS Demographic Statistics

FERS Full-time Non-Contributing

2009 2010 2011 2012 2013

Participant Count

Age

354,728 323,529 279,948 259,894 249,699

< = 29

30–39

14.6%

22.4%

12.1%

21.6%

8.1%

20.0%

5.8%

18.7%

4.5%

18.3%

40–49

50–59

32.7%

23.5%

33.0%

25.5%

33.9%

29.0%

33.3%

31.8%

32.2%

33.6%

60–69

70+

6.3%

0.5%

7.2%

0.6%

8.3%

0.7%

9.6%

0.8%

10.5%

0.9%

Tenure

Less than 2 years

2–5 years

25.2%

23.6%

16.6%

26.8%

6.9%

30.4%

1.4%

28.1%

1.4%

21.9%

6–10 years 17.5% 18.9% 19.9% 22.1% 24.2%

11–20 years

21 + years

20.3%

13.3%

21.8%

15.9%

23.9%

19.0%

26.8%

21.6%

30.2%

22.3%

Gender

Female

Male

44.5%

55.5%

44.3%

55.7%

43.3%

56.7%

43.4%

56.6%

43.6%

56.4%

Race and Ethnicity

American Indian or Native Alaskan 2.2% 2.0% 2.0% 2.0% 2.0%

Asian or Other Pacific Islander

Black or African American

3.1%

20.5%

2.9%

20.7%

2.7%

20.7%

2.5%

21.3%

2.5%

21.9%

White

Hispanic or Latino

44.1%

6.8%

42.9%

6.9%

40.3%

6.6%

38.6%

6.5%

38.4%

6.8%

Multi-Racial

Unknown

0.8%

22.5%

0.9%

23.6%

0.9%

26.8%

0.9%

28.3%

1.0%

27.4%

Education

Without High School Diploma 0.9% 0.8% 0.8% 0.8% 0.8%

High School Diploma

Some College or Training

31.4%

22.1%

32.1%

22.1%

30.5%

21.6%

29.2%

21.5%

29.8%

21.6%

Bachelor’s Degree

Post-Bachelor’s/Degree

12.2%

8.9%

12.4%

8.8%

12.0%

8.4%

11.8%

8.3%

12.0%

8.3%

Unknown 24.5% 23.8% 26.8% 28.3% 27.4%

Average Age 47.5 47.4 47.8 47.9 47.5

Average Tenure 8.5 9.6 10.8 12.2 13.0

Average Salary $53,996 $56,461 $59,248 $60,574 $61,394

Average TSP Balance $10,538 $13,333 $16,877 $20,355 $24,182
Year Count 

Salary

Number of 

Participants

Quintile 1 

Lowest Paid

Quintile 2 

Lower Paid

Quintile 3 

Mid-Range

Quintile 4 

Higher Paid

Bottom Top Bottom Top Bottom Top Bottom To

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

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

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

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

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

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

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

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

2009 Count 2,026,503 1 405,301 405,302 810,602 810,603 1,215,903 1,215,904 1,621

Salary $10,000 $46,625 $46,625 $54,122 $54,122 $63,930 $63,930 $88

Appendix DFERS Salary Quintiles