# Do UK employer-funded pensions need to be reported on the US FBAR?



## Sykes (Feb 25, 2021)

Hello. So I think I understand Form 8938, but I'm really confused about the FBAR.

The official IRS FBAR Reference Guide states the following:

The following persons are excepted from the FBAR filing requirement:

Participants in and Beneficiaries of Tax-Qualified Retirement Plans. A participant in or beneficiary of a retirement plan described in Internal Revenue Code § 401(a), 403(a), or 403(b) is not required to report a foreign financial account held by or on behalf of the retirement plan.

So if a British expat has relocated to live and work in the US (as a "US person") but they have a dormant employer pension from their former employment before their relocation. When the value of that pension (based on annual pension statements) reaches $10,000 or more, are they then required to report the pension on the FBAR? (assuming no other foreign accounts)

I tried to research this online but a lot of the information seems to be written by tax attorneys and accountants (who may have a slight bias given the nature of their tax business).

So I was just wondering if any expats here happen to definitely know whether such a pension needs to reported annually on the FBAR? I would really this appreciate this. Thanks so much. Cheers!


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## Moulard (Feb 3, 2017)

The change that a foreign retirement plan or annuity meeting s.401(a) (trusts), s.403(a) (annuity) or s403.(b) (public school annuity) is next to zero. 
To qualify it must have been created or organized in the United States.

So to cut a long story short, it will be reportable on the FBAR and potentially Form 8398


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## Sykes (Feb 25, 2021)

Moulard said:


> The change that a foreign retirement plan or annuity meeting s.401(a) (trusts), s.403(a) (annuity) or s403.(b) (public school annuity) is next to zero.
> To qualify it must have been created or organized in the United States.
> 
> So to cut a long story short, it will be reportable on the FBAR and potentially Form 8398


Hello. Thank you for taking the time to respond. I'll make sure to report my pension on the FBAR.
So despite the UK-US tax treaty, the US doesn't consider these deferred-income UK pension plans to be IRS-qualified retirement plans? (for FBAR filing purposes)
It just feels like an unnecessary yearly overhead, but okay if it needs to be reported then so be it. I just hope it's okay to report the December 31st year-end pension value from the annual statements (converted to dollars based on the IRS foreign exchange rate) because otherwise I would have no clue how to find out the maximum value for the year.
Thanks again!


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## Moulard (Feb 3, 2017)

The FBAR is a FinCen form not a tax form its an anti-money laundering form covered by Title 31 not Title 26 (the IRC)

From an FBAR perspective, if you get regular statements you can use the maximum value from one of those statements. If not you can report it as Maximum account value unknown

The tax treatment is different, and, as you rightly state will depend on the UK-US tax treaty. I am not really familiar with the UK treaty. I understand that it has far more generous pension clauses than most, but I doubt that the treaty would recharacterise them as US qualified. You should read the treaty being mindful of the savings clause that would otherwise allow the US to tax its citizens as if the treaty were not in effect.


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## 255 (Sep 8, 2018)

Sykes -- The quote about "Tax Qualified Retirement Plans" does not apply to your foreign pension. These are all special U.S. retirement plans that are generally tax deferred until retirement. The quote refers to "foreign financial accounts" held in the name of these plans. Cheers, 255


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## Sean-The Cloud Expat (Feb 28, 2021)

When in doubt, regarding Foreign interests, always report it!


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## Nononymous (Jul 12, 2011)

Sean-The Cloud Expat said:


> When in doubt, regarding Foreign interests, always report it!


I wouldn't make a blanket statement here. It depends on one's approach to compliance. Foreign investment accounts can be a huge reporting burden if considered trusts or PFICs, with potential US taxes owing. They may also not be subject to FATCA reporting, depending on the terms of each country's IGA. Choosing not to report them may be the smarter choice for anyone not wanting to be fully compliant.


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