Govexec.com reports that TSP participation rates for Federal Employees Retirement System (FERS) workers younger than 30 years old rose from 76.3% in 2000 to 83.8% in 2005. For FERS employees in the lowest-paid quintile, participation increased from 75.7% in 2000 to 78.8% in 2005, according to a report on the demographics and participant behavior.
The report also showed average deferral rates have increased. For FERS employees, the average rate grew from 7.1% in 2000 to 8.6% in 2005. For Civil Service Retirement System (CSRS) employees, deferral rates rose from 4.4% to 7.5%.
Greg Long, director of product development for the TSP pointed out those rates are higher than the average in the private sector, according to Govexec.com.
TSP board members said the civilian participation rates were as high as could be expected and noted any efforts to increase rates should focus on military members. The lack of matching contributions for military members may hinder participation rates. Last year Congress directed the Army to set up a pilot program to study whether matching contributions will boost recruiting efforts (See Military to Study Matching Contributions as a Recruiting Aid ).
Board members also noted participants have recently engaged in a high volume of transfers, probably due to the volatile stock market. The same trend among private sector 401(k) participants was noted in the most recent Hewitt 401(k) Index (See Post-Holiday Surges Lift Transfer Volumes ).
For TSP participants the demographic report showed the G Fund, which invests in government securities, and the C Fund, which tracks the Standard & Poor’s 500 Index of stocks in the largest domestic companies, were the most popular options across all age groups.
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