Thrift Savings Plan. (2012). Participant behavior and demographics: Analysis of 2008–2012.
- The study’s objective was to determine whether changes in the design of the Thrift Savings Plan (TSP) led to changes in federal employees’ participation in and contributions to the Federal Employee Retirement System (FERS). In 2009 and 2010, TSP instituted two major changes, a decrease in the waiting period for eligibility to receive employer matching contributions and automatic enrollment in a Government Securities Investment Fund (G Fund).
- This study used an interrupted time series design to compare employees’ investment behaviors before and after the TSP design changes. It used data from the TSP record-keeping system and the Office of Personnel Management (OPM).
- Across the TSP participants analyzed, participation in FERS increased by about 4 percentage points from 2009 to 2012, whereas the average deferral rate decreased slightly from the 2008 level. TSP’s design changes were not associated with how often employees monitored their FERS investments.
- The quality of causal evidence presented in this study is low, meaning that we are not confident that the estimated effects are attributable to TSP design changes. Other factors are likely to have contributed.
Immediate Contributions and Automatic Enrollment in the Thrift Savings Plan
- The study found that FERS participation increased among all TSP participants from 84.7 percent in 2009 (after the economic downturn) to 88.6 percent in 2012.
- The study found that the average contribution rate declined from 2008 to 2010, likely a result of automatic enrollment and the economic downturn. From 2010 to 2012, the deferral rate rose but did not reach the 2008 level.
- The two lowest salary quintiles increased or maintained their deferral rates from 2008, whereas the other quintiles had lower average deferral rates in 2012 than in 2008. However, the results also suggested that automatic enrollment had weaker impacts on FERS participation rates for people in the lowest wealth quintiles.
Considerations for Interpreting the Findings
The analysis excluded certain subgroups of TSP participants: employees without matching OPM records, members of the legislative and judicial branches, and part-time and intermittent workers. In addition, deferral rates were based on a comparison of total employee contributions to the annual salary rate for each year, because actual rates were not available in the data.
The interventions reviewed here were each implemented only once. This makes it difficult to conclude that the observed changes in enrollment rates were driven by the interventions themselves, instead of other concurrent changes (for example, changes in market conditions). Additionally, the study does not address the reasonable possibility that the interventions, and subsequent observed behaviors, occurred in response to existing economic trends.
Causal Evidence Rating
The quality of causal evidence presented in this study is low, meaning that we are not confident that the estimated effects are attributable to TSP design changes. Other factors are likely to have contributed.