Oh My!!!

I received an email telling me about a new banking change that took place on September 1, 2009. Based on the message, if you receive a pension from a US company and have your check direct deposited into a Panama Bank, you may be affected.

Here is a message I received by one of the Chiriquí Chatter readers.

The National Automated Clearing House Association (NACHA) has recently issued new banking industry rules which will have an impact on the method in which you receive your monthly pension benefit payment. These rules will take effect on September 18, 2009.

Under the new rules we will be required to identify all payments made to US domestic banks for recipients where the entire payment amount is subject to subsequently be transferred to a foreign bank account. The rules are referred to as “International ACH Transaction (IAT) rules” and are pursuant to requirements of the Office of Foreign Assets Control (OFAC). These rules affect all payments made via direct deposit only. It does not affect payments made by paper check.

Since we are required to adhere to these new rules and pay any penalties for non-compliance we have determined that we must discontinue issuing your monthly pension benefit via direct deposit. Your October 1, 2009 payment will be mailed to your home address on file.”

I wrote back to the reader and asked where he got this information. Here was his answer.

A friend of mine who is retired in Mexico received it from his pension company.

For now it does not affect social security payments, but, it cost him $80.00 penalty to receive his last payment.

He sent it to me, since he knows of my interest in retiring in Panama.

So there you have it boys and girls, if you receive a pension from a US company and it is direct deposited in a Panamanian bank, your pension company may decide to do the same. What a mess.

This newsletter will give you some more information.

4 thoughts on “Oh My!!!

  1. After reading that newsletter through three times, I’m still not yet sure how these new rules might impact individuals who live outside the USA and have pension payments direct deposited to US banks and who also maintain US mailing addresses.

    When I get to back to work next week, I plan to contact folks I know in our pension benefit department, Governance Group over Finance & Accounting and General Counsel about this rule. My organization is a retail entity in the federal sector with retirees living all around the world. This issue MUST have come up in discussion somewhere along the way. Our organization purchases annuities from an investment company for our retirees. I will soon be one of those retirees.

  2. Don Ray

    Have you hear more on this and does it apply to Panama?

    I am considering having a portion of my monthly pension deposited direct from the USG into my wife’s panamanian saving account and am trying to figure out if there will be a fee.

    I really enjoy this site and have gotten lots of useful info from it during the past 6 months, so has my wife and she was born here 😉

    Thanks, Roy

  3. Hi Roy. I had forgotten about this post and don’t have any money deposited here, so haven’t followed up on it. A portion of a check sounds complicated.

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