The percentage of participants who are contributing to the Thrift Savings Plan (TSP) hit a record high in July 2014, with 87.5 percent of TSP participants who are covered by the Federal Employees’ Retirement System (FERS) actively contributing to the TSP.
Contributions to the TSP are matched by employer contributions, up to 5 percent. The TSP is one leg of the FERS benefit – the others being Social Security and a defined benefit annuity.
In January of 2003, 87.4 percent of FERS participants were contributing to the TSP. Over the next few years, that number drifted downward to a level of 81.5 percent in 2009, in the wake of the market crisis and recession.
The Federal Retirement Thrift Investment Board (FRTIB), which runs the TSP, was monitoring this trend. In July of 2007, the FRTIB proposed legislation that would automatically enroll new employees into the TSP at a contribution rate of 3 percent, if the employees did not make an alternate choice. That legislation was enacted in 2009 and implemented in 2010. Since that time, the participation rate has climbed steadily.
“We are pleased that automatic enrollment has had its intended effect. More FERS participants than ever before are contributing to the TSP. Contributing to the TSP will help our participants retire with dignity,” said Greg Long, Executive Director of the FRTIB.