While overall participation rates in the TSP are at an all-time high among FERS employees, there are still significant differences in how much employees save according to their age and income.

The TSP recently reported that 85.7 percent of FERS employees “participate” under the agency’s definition, meaning that they make at least some personal investment—which in turn makes them eligible for matching contributions in addition to the automatic 1 percent of salary agency contribution that is made regardless of whether a FERS employee invests out of personal funds. The previous high occurred in 2003; during the intervening period, the rate had slipped a few percentage points, dropping especially around 2008-2009 during the worst of the financial crisis.

About two-thirds of CSRS employees invest in the TSP, a rate that has held steady for many years; they get no agency contributions. The TSP study did not include them, nor part-time or intermittent employees.

As might be expected, higher-paid FERS employees are more likely to invest, and to invest more. Among those in the lowest-paid fifth, 84.3 percent invest, compared with 95.7 percent in the highest-paid fifth. Similarly, the average investment rate for the former category is 5.1 percent and 9.7 percent in the latter.

There also were differences by age. Among those under 30, the average investment rate was 4.9 percent of salary while those 50-59 invest 9 percent on average and those 60-69 10.3 percent. However, the percentage of employees who do invest actually was the highest among those under 30, at 93.3 percent. That was largely because of the policy that took effect in 2010 requiring newly hired employees to invest by default, compared with the policy for those hired previously requiring them to opt into investing.

FEGLI Might Not Meet Needs in Retirement

Federal employees may take their Federal Employees’ Group Life Insurance (FEGLI) benefits into retirement if they’ve been in the program for at least five years, as most have been. But it can pay off to think about FEGLI in retirement well before that date arrives.