OFAC of 401K Participants

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Question:

Through our bank's trust department we manage several 401K plans. If a participant in the plan requests a distribution, do we need to OFAC the participant if they have no other accounts or relationships with the bank?

Answer:

Your decision to check the participant's name against OFAC lists is, as all OFAC checking decisions, a risk-based decision that your bank should make, after analyzing the risks of paying funds illegally to a blocked party.

First published on BankersOnline.com 9/14/09