# help with the 8938



## emilene

I am trying to fill out the new US tax form 8938, 'Statement of Specified Foreign Assets'. I am confused by Part 2, in which you are supposed to report 'Other Foreign Assets'. I am a US citizen but live and work in the UK. I pay into a pension at work. Does this count as a foreign asset? The form asks you the maximum value of the asset during the tax year, but my annual pension statements never mention anything like its actual monetary value. 

If my work pension does count as a foreign asset, and I'm supposed to find out how much its actually worth, then Part 3 suggests that it should be reported on another IRS form and/or schedule. But I had no idea I was supposed to be including my pension as income -- and where am I supposed to be reporting it, apart from the 8938? Can anyone help me? I'm lost.

Emilene


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## TooMuchCoffee

I'm in the same boat, and curious as to what you're supposed to do. I _think_ if you don't know the maximum value you can enter "0," but it doesn't make sense to me. 

(also, in my case if the value is "0," then I don't actually have to fill out the 8938 at all. If it does have a value, I probably do have enough assets to have to complete the form. But I don't know what the value is. Going in circles...)


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## Mona Lisa76

My understanding is that you're supposed to state in dollars what it's value was on Dec 31st of 2011. If you can't find out exactly, make a good faith estimate. Unless it's a defined-benefit pension plan, my understanding is that it's treated like a foreign account and thus needs to be reported. I am able to go online and check via the insurer (Aviva) to see what my plan is worth and how much I've contributed so far via my employer...we each contribute 5% of my wages.


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## Bevdeforges

If it's a defined benefits pension, then you can simply forget about it. Most defined benefits pensions depend on your working a specified period of time and if you're not there yet, there's no current value to the pension. If it's a government pension, it doesn't fall under the IRS reporting guidelines, so doesn't need to be reported.

If it's a portable pension that is a defined contribution pension, then you need to make some sort of good faith estimate. But if you're resident outside the US, you don't need to file the form 8938 at all unless your foreign (i.e. non-US) financial assets total at least $200,000 worth. (The threshold is higher for overseas residents than for US residents.)
Cheers,
Bev


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## TooMuchCoffee

Mine is a defined benefit pension plan, and I don't know what it's worth. I get statements that say that if I stay in my job, when I retire I will get XX amount of income (as in, 20 years from now). But I don't know what the value is now. 

So: defined benefit plans are treated differently?


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## Mona Lisa76

Too Much, Bev explained it quite succinctly.


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## Bevdeforges

TooMuchCoffee said:


> Mine is a defined benefit pension plan, and I don't know what it's worth. I get statements that say that if I stay in my job, when I retire I will get XX amount of income (as in, 20 years from now). But I don't know what the value is now.
> 
> So: defined benefit plans are treated differently?


Defined benefit plans are treated differently. They aren't considered "financial assets" because if you quit your job tomorrow, you wouldn't get anything.
Cheers,
Bev


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## emilene

Bevdeforges said:


> Defined benefit plans are treated differently. They aren't considered "financial assets" because if you quit your job tomorrow, you wouldn't get anything.
> Cheers,
> Bev


Thanks for the advice, very useful. I am a bit confused by the terminology though, having gotten used to Brit speak. I have what the Brits call a 'final salary pension', which will pay an annuity when I retire. Is that the same as a 'defined benefit plan'?


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## Bevdeforges

emilene said:


> Thanks for the advice, very useful. I am a bit confused by the terminology though, having gotten used to Brit speak. I have what the Brits call a 'final salary pension', which will pay an annuity when I retire. Is that the same as a 'defined benefit plan'?


I'm not sure of the technical definitions employed (on either side of the pond) but in general, a defined benefit plan is one where your ultimate benefit (i.e. how much you get each month for a retirement pension) is determined when you retire and is based on years worked and how much salary you had each year. Until you actually retire, there is no value to the fund because you don't know at any interim point how much you'll ultimately get.

A defined contribution plan is one where you determine how much you put into the plan each year - and your ultimate benefit depends on how much is in the plan when you retire. This is the sort of retirement fund you need to report on the IRS forms.
Cheers,
Bev


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## emilene

emilene said:


> Thanks for the advice, very useful. I am a bit confused by the terminology though, having gotten used to Brit speak. I have what the Brits call a 'final salary pension', which will pay an annuity when I retire. Is that the same as a 'defined benefit plan'?


Thanks, I think I get it now.


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## TooMuchCoffee

Hmm. I now I am a bit more confused. Though I do have a defined benefit pension, if I quit my job, I do get something from it. Not now, but when I retire -- I would get a pension based on whatever accumulated in the plan until the point at which I left the job. Thing is, they don't work out that amount until you leave the job, and you don't get that money until you retire. But there is something there -- the money doesn't just vanish.

I still don't think it belongs on an FBAR, since I have no signing authority over this money. I can kind of see why it would belong on an 8938. But since I don't know what amount I would put on the form, "0" would have to be it. Anything else would be a guess.


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