Creditor protection of 403b and governmental 457b

Submitted by learner on Sat, 2023-03-04 00:07

I understand that a 401k plan is ERISA creditor protected. Are a 403b and a governmental 457b plans also ERISA creditor protected?



Submitted by Alan - IRA critic on Sat, 2023-03-04 00:37

  • Most but not all 403b plans are ERISA plans – see following link:
  • Examples of ERISA vs. Non-ERISA 403(b) Plans | NATIONAL TAX-DEFERRED SAVINGS ASSOCIATION (ntsa-net.org)
  • 457b plans are not ERISA protected
  • Creditor protection. A governmental 457(b) participant in personal bankruptcy can completely protect their account from bankruptcy creditors. But someone facing a non-bankruptcy lawsuit only receives the protection offered by state law.Governmental 45(b) plan funds must be held apart from the employer’s assets in a trust fund. 

Submitted by learner on Sat, 2023-03-04 01:05

A statement in your link: “The Government Accountability Office says that generally, ERISA 403(b) plans tend to be the sole or primary plan offered by an employer, while non-ERISA plans are mostly supplemental to another retirement savings plan offered by an employer.” According to the 403b plan document, it is a “supplementary retirement savings plan” offered by a state university.  It looks like it is not an ERISA 403b plan.  If it is indeed not an ERISA plan, is there any legal disadvantage in rolling it over to a separate IRA in California?

Submitted by Alan - IRA critic on Sat, 2023-03-04 04:00

Probably no disadvantage because even a non ERISA 403b would likely be considered a “private retirement plan” under the CA statute, which would give a rollover IRA funded by the 403b rollover creditor protection in CA.

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