We have a corporation (ABC Inc) that opened 2 checking and a savings account. The corporation is owned by "ABC Inc 401K". Is the beneficial ownership rule applicable to a 401K? We have never seen this before and are uncertain how to proceed if applicable. Any insight is greatly appreciated.

The definition of "account" excludes employee benefit plans.

FinCEN is adding to the final rule the definition of the term ‘‘account’’ that is found in the CIP rules, which by its terms
excludes an account opened for the purpose of participating in an employee benefit plan established under the Employee Retirement Income Security Act of 1974.

Trying put this all into perspective....this meaning that since this is a not for profit we do not need to complete beneficial ownership on the accounts - not even on who may manage the accounts?


Thanks,

It's not because it's a not-for-profit entity, it's because 401k plans are ERISA accounts and therefore excluded from both beneficial ownership and CIP requirements. From the preamble of the CDD Final Rule:

"In order to maintain consistency with the CIP rules, FinCEN is adding to the final rule the definition of the term ‘‘account’’ that is found in the CIP rules, which by its terms excludes an account opened for the purpose of participating in an employee benefit plan established under the Employee Retirement Income Security Act of 1974. This added provision is not only consistent with CIP but also appropriate for the final rule, inasmuch as accounts established to enable employees to participate in retirement plans established under ERISA are of extremely low money laundering risk."

See §1020.100(a)(2)(iii): "Account does not include an account opened for the purpose of participating in an employee benefit plan established under the Employee Retirement Income Security Act of 1974."