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403(b) FAQ

When major investment organizations experience financial trouble, how does that affect my 403(b)? 

403(b) investments are subject to market fluctuations. Contact your 403(b) vendor or visit their website to find out how they are responding to current financial markets.

What types of investments make up my 403(b) account? 

403(b) investments are made up of annuities and/or mutual funds. An annuity is an investment in insurance and can be variable or fixed.

  • Variable annuities are generally not subject to creditor claims. However, they are not immune to market fluctuations. Variable annuities are protected from insurance companies that become insolvent.
  • Fixed annuities are generally not protected from creditor claims on companies’ assets. However, different insurance companies are organized differently in order to protect assets of that company from creditors of other subsidiaries or the parent company.

Mutual funds are made up of stocks, bonds and money markets. They are generally not subject to creditor claims. However, they are not immune to market fluctuations.

Contact your financial advisor or 403(b) vendor if you have questions about how your 403(b) investments are allocated and the extent that assets are subject to creditor claims.

Are my 403(b) funds FDIC insured? 

No, 403(b) products are not FDIC insured or insured by any federal government agency.

What protections exist for my 403(b) account? 


The California Life & Health Insurance Guarantee Association provides limited protection to policyholders when an insurance company licensed in California to sell life insurance, health insurance and annuities becomes insolvent.

Mutual funds

You are the owner of your 403(b) account, the financial institution you are invested through just holds the assets on your behalf and facilitates your transactions.  All investments however are subject to market fluctuations and may lose value.

Contact your 403(b) vendor to find out what specific protections exist for your accounts. You can find vendor contact information on 403bCompare.