Analysis for 2000–2005

Thrift Savings 

Participant Behavior 

and Demographics


The FERS participation rate (a measure of current full-time FERS-covered employees making voluntary salary 

deferrals) stood at 88.8% in 2005, a slight increase from 88.4% in 2000. Participation among full-time FERS 

employees has been near 88% since 1997, after rising steadily for ten years from the plan’s inception in 1987, when 

44.1% participated. 

The overall average salary deferral rate (the percentage of basic pay contributed to the TSP) for FERS contributors 

increased from 7.1% in 2000 to approximately 8.6% in 2005. This rate has increased every year since 1988, the first 

full year of plan operation, when it was 4.9%. The average salary deferral rate in 2005 for CSRS contributors was 

7.5%, up from 4.4% in 2000. The significant increases in deferral rates are largely attributable to higher statutory 

maximum contribution limits. The maximum permitted deferral rates increased 1% each year from 2000, when 

they stood at 10% for FERS and 5% for CSRS. In 2005, the maximum permitted salary deferral was 15% for FERS 

participants and 10% for CSRS participants. Another contributing factor is the addition of “catch-up” contributions, 

which, starting in 2002, allowed TSP participants age 50 and older to make contributions above the statutory 

maximums. 

The average year-end allocation of investments by FERS and CSRS participants shows that the two most popular 

investment options at all age groups are the Government Securities Investment (G) Fund, which invests in short 

term non-marketable U.S. Treasury securities, and the Common Stock Index Investment (C) Fund, which invests in 

a Standard & Poor's 500 stock index fund. As expected, the rate of exposure to the equity markets is higher among 

younger participants.

Data Collection and Methodology

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

from the Office of Personnel Management (OPM). In each year covered by this report, the TSP record keeper 

provided a computer tape containing 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 adding data on participants’ annual salary rate, gender, length of Federal service, and 

employment (full-time vs. part-time) status. 

Not all records for participants on the TSP extract can be matched with OPM data. In 2005, a total of 2.4 million 

participants were identified on the tape from the TSP record keeper, and OPM returned data on approximately 2.3 

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 

cannot match such records. Finally, approximately 172,000 part-time or intermittent employees are identified in 

the data, but they are excluded from the analyses because their hourly work schedule (and therefore their actual 

compensation) is not known.

For purposes of this study, a “FERS contributor” is defined as an employee who contributed his or her own money 

(i.e., an employee contribution) at any time during the year. An “active FERS participant” is one who received at 

least one employee or employer contribution during the year. 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 

this report. 

In this report, ages are broken down into 10-year increments. However, as CSRS was closed to new entrants after 

1983, there were only insignificant numbers of CSRS participants younger than age 30 in any of the years covered 

within this report. 

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

annual salary; the fifth quintile represents the 20% of records showing the highest paid participants. Data with 

respect to the dollar-denominated salary ranges for the quintiles in each year can be found in the Appendix.


The analysis provided is subject to some 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 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 address TSP population characteristics. The exhibits and narratives display, over time, the 

relationships between participation rates and age and salary, and between deferral rates and age and salary. 

Age, Salary, Participation Rates, and Deferral Rates of FERS Participants

Figure 1 shows FERS participation rates (the number of FERS participants who made voluntary employee 

contributions, expressed as a percent of the number of active FERS participants) by age. 

FERS Participation Rates by Age

Age

FERS participation rates modestly increase based on age, except in the case of participants over 70, who participate 

at a slightly lower rate than those in the age 60–69 category. In 2005, the overall FERS participation rate was 88.8% 

and ranged from 83.8% in the youngest age group to 91.7% in the 60–69 age group. In looking at changes from 2000 

through 2005, most groups show little variation. The exception is among the youngest age group, where the average 

participation rate among the youngest participants has increased from 76.3% in 2000 to 83.8% in 2005. Participation 

in defined contribution plans among younger, and generally lower paid, employees is typically lower than average. 

The trend of increasing participation among the youngest Federal employees is therefore particularly encouraging. 

•

•

•

•

2005

2004

2003

2002

2001

2000

0%

20%

40%

60%

80%

100%

All Under 30 30-39 40-49 50-59 60-69 70+

Figure 1

Participation Rate


Figure 2 shows FERS participation rates (the number of FERS participants who made voluntary employee 

contributions, expressed as a percent of the number of active FERS participants) by pay quintile.

FERS Participation Rates by Pay Quintile

Pay Quintile

Not surprisingly, FERS participation rates increase with pay. However, participation rates in all pay groups are 

strong relative to average rates typically seen in private sector defined contribution plans. In 2005, the overall FERS 

participation rate was 88.8% and ranged from 78.8% in the lowest paid group (Q1) to 96.7% in the highest paid 

group (Q5). As reflected in the changes from 2000 through 2005, most groups show little variation. The exception is 

among the lowest paid group (Q1), where average participation is trending upward and has increased from 75.7% in 

2000 to 78.8% in 2005. Again, since participation among lower paid employees is typically weaker than average, the 

trend of increasing participation among the lower paid Federal employees is encouraging.

Figure 3 shows deferral contribution rates (percentages of basic pay contributed to the TSP) for FERS contributors 

by age. 

FERS Salary Deferral Contribution by Age

Age

The data show a clear correlation between FERS contribution rates and participant age. In 2005, the average contribution rate among all FERS contributors was 8.6% of pay and ranged from a low of 6.4% among the youngest group 

to over 11% among the older groups of contributors. In looking at changes from 2000 to 2005, most groups show 

significant increases over the period. The largest increases are found in the groups age 50 or older, where the impact 

of catch-up contributions (first made available in 2002) combined with increases in the maximum contribution 

allowed, has led to dramatic increases in average contribution rates. 

0%

20%

40%

60%

80%

100%

Q5

Highest Paid

Q4

Higher Paid

Q3

Mid-Range

Q2

Lower Paid

Q1

Lowest Paid

All

2005

2004

2003

2002

2001

2000

Participation Rate

Figure 2

Figure 3

0%

2%

4%

6%

8%

10%

12%

All Under 30 30-39 40-49 50-59 60-69 70+

2005

2004

2003

2002

2001

2000

Salary Deferral


Figure 4 shows contribution rates for FERS contributors by pay quintile. 

FERS Salary Deferral Contribution by Pay Quintile

Pay Quintile

The data show that FERS contribution rates increase with participant pay. In 2005, the average contribution rate 

among all FERS contributors was 8.6% of pay and ranged from a low of 6.4% among the lowest paid group (Q1) 

to 10.5% among the highest paid group (Q5) of contributors. In looking at changes from 2000 to 2005, all groups 

show increases over the period. The largest increases are found among the higher paid groups (Q4 and Q5), where 

the impact of catch-up contributions (first made available in 2002), combined with increases in the maximum 

contribution allowed, has led to significant increases in average contribution rates.

Age, Salary, and Deferral Rates of CSRS Participants

Participation rates for CSRS employees classified by age and salary are not shown because data regarding these 

factors is not available for non-participating CSRS employees. However, using OPM data on the total number 

of active CSRS employees, we are able to estimate the overall CSRS participation rate. The estimated CSRS 

participation rate in 2005 was 67%, compared with approximately 65% in 2000. The CSRS participation rate in 1988, 

the first full year of the TSP, was approximately 20%. 

Deferral rates by age for CSRS participants who are contributing to the TSP are shown in Figure 5. 

CSRS Salary Deferral Contribution by Age

Age

0%

2%

4%

6%

8%

10%

All 30-39 40-49 50-59 60-69 70+

2005

2004

2003

2002

2001

2000

0%

2%

4%

6%

8%

10%

12%

Q5

Highest Paid

Q4

Higher Paid

Q3

Mid-Range

Q2

Lower Paid

Q1

Lowest Paid

All

2005

2004

2003

2002

2001

2000

Figure 5

Figure 4

Salary Deferral Salary Deferral


The data reflect consistently increasing rates of deferral as age increases and increasing rates of deferral over time. 

The average deferral in 2005 ranged from 5.7% in the youngest age group to 8.3% in the older groups. As reflected 

in changes from 2000 through 2005, all groups show significant increases over the period. The largest increases are 

found in the groups age 50 or older, where the impact of catch-up contributions combined with increases in the 

maximum allowed contribution has led to dramatic increases in average contribution rates. 

Deferral rates by pay quintile for CSRS contributors to the TSP are shown in Figure 6.

CSRS Salary Deferral Contribution by Pay Quintile

Pay

The data show that CSRS contribution rates increase significantly with participant pay. In 2005, the average 

contribution among all CSRS contributors was 7.5% of pay and ranged from a low of 6.2% among the lowest paid 

group (Q1) to 8.9% among the highest paid group (Q2) of contributors. The data also show that from 2000 through 

2005, CSRS deferral rates increased markedly in all pay quintiles. The increases in the average deferral rates are the 

result of many participants electing to contribute at the higher statutory maximum contribution rates.

Distribution of Deferral Rates

 The distributions of FERS contributors’ deferral rates are shown in Figure 7. 

FERS Salary Distribution of Deferral Rates

Deferral Rates

0%

2%

4%

6%

8%

10%

Q5

Highest Paid

Q4

Higher Paid

Q3

Mid-Range

Q2

Lower Paid

Q1

Lowest Paid

All

0%

10%

20%

30%

40%

50%

1-2% 3-4% 5-6% 7-8% 9-10% 11-12% 13-14% 15% >15%

2005

2004

2003

2002

2001

2000

2005

2004

2003

2002

2001

2000

Figure 6

Figure 7

Salary Deferral

Participants


The chart above shows the significant impact that two key plan design elements have on the behavior of FERS 

participants. The key elements are: 1) the level of agency matching contributions and 2) the statutory maximum 

contribution limits. 

FERS participants receive matching contributions on their deferrals up to 5% of pay. This matching level has 

remained constant throughout the existence of the TSP. The data show that there is a significant group of participants who contribute only to the level (i.e., 5%) that is matched by the agencies. This group has stayed relatively 

constant in size over the period 2000-2005, sliding modestly from 26% to 23% of all contributors. 

The statutory maximum contribution limits have increased annually in 1% increments, from 10% in 2000 to 15% in 

2005. The data show that 44% of participants were contributing at the statutory maximum in 2000. As the maximum 

contribution amount was increased, the concentration around the 9-10% bracket dissipated as significant portions 

of these participants reached for newly allowable higher contribution amounts. However, not all participants 

could afford to contribute at the highest levels. So increasingly smaller groups of participants reached maximum 

contribution levels in each successive year. We also note that contributions above 15% are generally attributable to 

FERS participants age 50 or older who utilize catch-up contributions. The data show that in 2005, approximately 5% 

of FERS contributors fell into this category.

The distributions of CSRS contributors’ deferral rates are shown in Figure 8.

CSRS Distribution of Deferral Rates

Deferral Rates

The chart above shows the significant impact that changes to the statutory maximum contribution limits had on 

the behavior of CSRS participants. The statutory maximum contribution limits for CSRS increased annually in 1% 

increments, from 5% in 2000 to 10% in 2005. In 2000, 76% of CSRS contributors were contributing at the maximum 

level of 5%. As the maximum contribution amount was increased, the concentration of contribution rates at 5-6% 

dissipated as significant portions of CSRS participants reached for newly allowable higher contribution amounts. As 

with the FERS participants, not all CSRS participants could afford to contribute at the highest levels. So increasingly 

smaller groups of participants reached maximum contribution rates. We also note that contributions above 10% 

are generally attributable to participants age 50 or older who utilize catch-up contributions. The data show that in 

2005, approximately 17% of CSRS contributors fall into this category. While the number of catch-up contribution 

users is significantly larger in the CSRS group than the FERS group, this is expected, given that a significantly larger 

percentage of CSRS employees fall into the 50 or older age group. 

0%

10%

20%

30%

40%

50%

60%

70%

80%

1-2% 3-4% 5-6% 7-8% 9-10% >10 %

2005

2004

2003

2002

2001

2000

Figure 8 Participants


Figure 9 illustrates FERS deferral rates in 2005 within selected pay quintiles.

FERS 2005 Distribution Salary Deferral Contribution 

Rates by Pay Quintile

Deferral Rates

The distribution of deferral rates in 2005 varied considerably at different pay levels. Among contributing FERS 

partici­pants in the lowest of the five pay groups (Q1), 63% deferred 6% of salary or less, and less than 13% deferre

above 12% of pay. Among FERS contributors in the mid-range pay group (Q3), 46% deferred 6% of salary or less, 

while 23% deferred above 12% of pay. The trend towards higher deferral rates at higher salary levels continues in 

the highest paid group (Q5), with approximately 25% deferring 6% of pay or less, and 37% deferring above 12% 

of pay. The biggest grouping for all pay groups, except the highest paid group (Q5), is at the 5-6% level where the 

agency matching contribution ceiling is reached. 

Figure 10 illustrates CSRS deferral rates in 2005 within selected pay quintiles.

CSRS 2005 Distribution of Salary Deferral Contribution 

Rates by Pay Quintile

Deferral Rates

CSRS participants exhibit a similar trend of higher deferral rates among higher salary brackets. Among contri­butin

CSRS participants in the lowest of the five pay groups (Q1), 61% deferred 6% of salary or less, and 28% deferred 9% 

or more of pay. Among CSRS contributors in the mid-range pay group (Q3), 44% deferred 6% of salary or less, while 

44% also deferred 9% of pay or more. The trend towards higher deferral rates at higher salary levels continues in the 

highest paid group (Q5), with approximately 27% deferring 6% of pay or less, and 62% deferring 9% of pay or more. 

0%

5%

10%

15%

20%

25%

30%

1-2% 3-4% 5-6% 7-8% 9-10% 11-12% 13-14% 15% >15%

Q5-Highest Paid

Q4-Higher Paid

Q3-Mid-Range

Q2-Lower Paid

Q1-Lowest Paid

0%

5%

10%

15%

20%

25%

30%

35%

1-2% 3-4% 5-6% 7-8% 9-10% >10%

Q5-Highest Paid

Q4-Higher Paid

Q3-Mid-Range

Q2-Lower Paid

Q1-Lowest Paid

Figure 9

Figure 10 Participants Participants


Participant Investments

In 2005, the TSP provided five individual investment fund choices and five lifecycle options for participants: the 

Government Securities Investment (G) Fund, which invests in short term non-marketable U.S. Treasury securities; 

the Fixed Income Index Investment (F) Fund, which invests in a Lehman Brothers Aggregate bond index fund; 

the Common Stock Index Investment (C) Fund, which invests in a Standard & Poor’s 500 stock index fund; the 

Small Capitalization Stock Index Investment (S) Fund, which invests in a Wilshire 4500 stock index fund; and the 

International Stock Index Investment (I) Fund, which invests in a Morgan Stanley Capital International EAFE 

(Europe, Australasia, Far East) stock index fund. The Lifecycle (L) Funds are asset allocation portfolios, which are 

constructed from the five individual funds. The L Funds first became available in August of 2005. 

The investment allocations of FERS and CSRS participants, as indicated by their 2005 year-end balances in the 

respective investment funds, are presented in Figures 11 and 12. 

FERS Investment Allocation by Age (as of 12/31/2005)

Age

CSRS Investment Allocation by Age (as of 12/31/2005)

Age

Figures 11 and 12 show that, in general, participants are exposing themselves to market risk in inverse proportion to 

their age. Exposure to the risk-free G Fund is significant within all age groups, but it grows proportionally larger with 

older age groups. Likewise, exposure to equity market risk shrinks with older age groups. However, one area where 

I Fund

S Fund

C Fund

F Fund

G Fund

Lifecycle Funds

0%

20%

40%

60%

80%

100%

Under 30 30-39 40-49 50-59 60-69 70+

0%

20%

40%

60%

100%

80%

30 - 39 40 - 49 50 - 59 60 - 69 70+

I Fund

S Fund

C Fund

F Fund

G Fund

Lifecycle Funds

Figure 12

Figure 11
1

this trend is broken is with FERS participants under 30 years old. These participants hold a larger proportion of the 

G Fund than their counterparts in their 30s and 40s. This is likely due to the fact that when participants do not give 

the TSP direction on where to invest their contributions, their money is defaulted to the G Fund. Participants under 

30 are also more likely to be new to the TSP and therefore have small accounts. These factors suggest that a lack of 

participant engagement, paired with the G Fund default policy, are the drivers behind this anomaly. 

Figures 13 and 14 look only at participants who had money invested in the L Funds and at how that money was 

allocated among the L Funds at the end of 2005. The five L Funds are the L 2040 Fund, L 2030 Fund, L 2020 

Fund, L 2010 Fund, and L Income Fund. Participants are instructed to select the L Fund with the date that most 

closely matches the date when they expect to start drawing retirement income.

FERS Life Fund Investment Allocation By Age (as of 12/31/2005)

Age

CSRS Life Fund Investment Allocation by Age (as of 12/31/2005)

Age

The L Funds were introduced to TSP participants in August of 2005. Therefore, the participants had only five 

months within 2005 to direct contributions and transfers to these funds. However, the data show participants are 

generally using the L Funds as we would expect, with younger employees more heavily allocated to the L 2030 

and L 2040 Funds, and older participants more heavily allocated to the L 2010 and L Income Funds. While some 

anomalies do exist, the data suggests that participants, in general, understand the purpose of the L Funds. 

0%

20%

40%

60%

80%

30-39 40-49 50-59 60-69 70+

L 2040 Fund

L 2030 Fund

L 2020 Fund

L 2010 Fund

Income Fund

L 2040 Fund

L 2030 Fund

L 2020 Fund

L 2010 Fund

Income Fund

0%

20%

40%

60%

80%

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

Figure 13

Figure 14
Appendix

Contribution limits by year and retirement system:

Maximum allowed contributions 

as a percent of pay

Year FERS CSRS

2005 15

2004 1

2003 1

2002 1

Catch-up contributions for participants age 50 or older were permitted, starting in 2002. Catch-up 

contribution limits by year:

Maximum catch-up contributions

Year Applicable to both FERS and CSRS

2005 $5,

2004 $4,

2003 $3,

2002 $2,

A match is provided for those FERS participants who make salary deferral contributions. The 

matching schedule is as follows:

Participant Contribution Match Percentage

First 3% of pay 1

4% to 5% of pay

Above 5% of pay No
Group 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

2005 FERS

EE Count 1,620,176 1 324,035 324,036 648,070 648,071 972,106 972,107 1,296,141 1,296,142 1,620,176 

Salary $10,000 40,216 40,216 45,269 45,269 53,040 53,040 73,492 73,492 $200,000 

2005 CSRS

EE Count 430,454 1 86,091 86,092 172,182 172,183 258,272 258,273 344,363 344,364 430,454 

Salary 15,000 46,340 46,340 55,595 55,595 73,364 73,364 93,886 93,886 200,000 

2004 FERS

EE Count 1,561,426 1 312,285 312,286 624,570 624,571 936,856 936,857 1,249,141 1,249,142 1,561,426 

Salary 10,000 38,531 38,531 43,872 43,872 50,578 50,578 70,237 70,237 200,000 

2004 CSRS

EE Count 469,022 1 93,804 93,805 187,609 187,610 281,413 281,414 375,218 375,219 469,022 

Salary 13,487 44,935 44,935 53,236 53,236 70,396 70,396 90,692 90,692 200,000 

2003 FERS

EE Count 1,512,790 1 302,558 302,559 605,116 605,117 907,674 907,675 1,210,232 1,210,233 1,512,790 

Salary 10,000 36,385 36,385 42,470 42,470 47,714 47,714 65,930 65,930 200,000 

2003 CSRS

EE Count 507,215 1 101,443 101,444 202,886 202,887 304,329 304,330 405,772 405,773 507,215 

Salary 15,000 42,971 42,971 50,723 50,723 67,132 67,132 86,005 86,005 200,000 

2002 FERS

EE Count 1,446,077 1 289,215 289,216 578,431 578,432 867,646 867,647 1,156,862 1,156,863 1,446,077 

Salary 10,000 35,223 35,223 40,822 40,822 45,309 45,309 62,790 62,790 200,000 

2002 CSRS

EE Count 557,553 1 111,511 111,512 223,021 223,022 334,532 334,533 446,042 446,043 557,553 

Salary 14,560 41,679 41,679 48,652 48,652 63,320 63,320 81,751 81,751 200,000 

2001 FERS

EE Count 1,359,721 1 271,944 271,945 543,888 543,889 815,833 815,834 1,087,777 1,087,778 1,359,721 

Salary 10,140 33,430 33,430 39,443 39,443 43,326 43,326 58,848 58,848 200,000 

2001 CSRS

EE Count 582,275 1 116,455 116,456 232,910 232,911 349,365 349,366 465,820 465,821 582,275 

Salary 13,771 40,472 40,472 46,214 46,214 60,242 60,242 77,303 77,303 200,000 

2000 FERS

EE Count 1,256,979 1 251,396 251,397 502,792 502,793 754,187 754,188 1,005,583 1,005,584 1,256,979 

Salary 10,708 32,032 32,032 38,081 38,081 41,442 41,442 55,626 55,626 200,000 

2000 CSRS

EE Count 583,679 1 116,736 116,737 233,472 233,473 350,207 350,208 466,943 466,944 583,679 

Salary 13,168 39,867 39,867 44,213 44,214 56,823 56,823 73,266 73,266 200,000 

Salary Quintiles