The rate of employee participation in the Thrift Savings Plan has been rising steadily since the plan's inception, according to a new report by the Federal Retirement Thrift Investment Board.
In 1996, 82.9 percent of employees covered under the Federal Employees Retirement System participated in the TSP, up from 80 percent the year before, according to the report. When the plan was created in 1987 the FERS participation rate was only 44.1 percent.
Participation rates among Civil Service Retirement System employees could not be precisely calculated because information about CSRS employees who have not established TSP accounts was not available, the report said.
Approximately 33 percent of FERS participants are contributing at the 10 percent maximum allowable rate, while nearly 75 percent of CSRS participants contribute at the maximum 5 percent rate. These participants would be most likely to be affected by a bill introduced last fall by Rep. Connie Morella, R-Md., that would eliminate the contribution percentage caps.
The average percentage of pay contributed to the Thrift Savings Plan for FERS participants is 6.4 percent, while CSRS participants contribute an average of 4.4 percent. In 1988, the average FERS rate was 4.9 percent.
Both FERS and CSRS contribution rates vary with age and salary levels, the study found. The average rate in 1996 ranged from 5.6 percent for the youngest participants to 7.9 percent in the oldest age group and from 5 percent in the lowest salary bracket to 8 percent in the highest pay category. The average CSRS deferral ranged from 4 percent to 4.7 percent in the youngest and oldest age groups respectively, and from 3.6 percent to 4.7 percent for the lowest and highest salary brackets.
Participation and contribution rates were also higher among male employees. About 84 percent of men contributed an average of 6.8 percent, while 82 percent of women contributed an average of 6 percent.
Of the three TSP funds (G, C and F), participants generally chose to invest the most in the G Fund, which is invested in short-term nonmarketable Treasury securities. The average 1996 investment allocation among all contributors was 56 percent in the G fund, 38 percent in the C Fund and 6 percent in the F fund.
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