Reasons for Participating, and Not

Among participants, the most common reason is the tax advantage, cited by 70 percent, followed by the convenience of payroll deduction, 57 percent, the availability of matching contributions (86 percent of FERS respondents) and freedom to retire at the time of one’s choosing (41 percent). Of those not participating in the TSP, the most commonly cited reason was lack of money, followed by saving in other ways, ineligibility to invest because of a waiting period after a hardship withdrawal, and inability to access the money before retirement. Only small percentages cited dissatisfaction with the investment options or the program’s complexity. Only a fourth of those surveyed said that more investment options would boost the number of workers participating in the TSP while two-thirds said that automatic enrollment would do so.