FBAR and USS pension value

After much reading, it looks to me that:
- One who participates in USS (but does not get distributions yet) does not need to report USS on FBAR, but it is probably prudent to report it on the form 8938.
- However, if there were no distributions, the value of USS for the purpose of filing form 8938 is zero.
(and I am a HCE)

I am not sure about employer's contributions issues. I do not think they are taxable, but I do not see how to figure them out so that to pay tax on them and get more of a pension tax free later.
My university states that:
"The university pays the balance of the cost of the benefits. The contributions paid by the university are variable and depend on the results of the scheme actuary’s valuation of the scheme. Generally speaking, the university’s contributions are significantly more than the contributions paid by members."

After much reading, it looks to me that:
- One who participates in USS (but does not get distributions yet) does not need to report USS on FBAR, but it is probably prudent to report it on the form 8938.
- However, if there were no distributions, the value of USS for the purpose of filing form 8938 is zero.
(and I am a HCE)

I am not sure about employer's contributions issues. I do not think they are taxable, but I do not see how to figure them out so that to pay tax on them and get more of a pension tax free later.
My university states that:
"The university pays the balance of the cost of the benefits. The contributions paid by the university are variable and depend on the results of the scheme actuary’s valuation of the scheme. Generally speaking, the university’s contributions are significantly more than the contributions paid by members."

I believe that USS pension MUST be reported on 8938.

Your and your employer contributions to your USS pension are definitely US taxable....there's no provision for deferring tax on contributions made to foreign pension plans in the IRS code. You have two options:

1) claim a treaty exemption;

2) pay tax on the contributions in the current tax year. This can get complicated as you have to determine the status of the pension for IRS tax purposes. Is it a foreign grantor trust, is PFIC applicable?

Barcrest, where did you find what value they want? Sorry if it is a no-brainer...

Nun, the IRS and the London Embassy told me last week that the pension required reporting on 8983 (if threshold met) and that it doesn't need to go on the FBAR, and forms 3520/3520-A and 8833 were not necessary. I didn't ask about PFIC. Unfortunately, the conversation was moved along by the agent and I learned nothing useful to help me make an independent decision if this pension necessitated those forms. I got his name and badge though he laughed when I asked for the info. He said he and his colleagues have taken up the motto "We're not happy if you're not happy."  I haven't gotten that sentiment from my contact with agents in the US...everything I've asked this year regarding foreign financial forms has been met with "Your enquiry is beyond the scope of the IRS helpdesk".

I've read you don't have to have the tax treaty form filed for it to apply, however the 8833 says if you do not file it you MAY be penalised $1k. It's not clear to me why I shouldn't have to file it. I read somewhere that having filed it once (presumably in the year you began to  make contributions) it is implicit that the tax treaty applies for subsequent years. I can't recall the online source.

"Barcrest, where did you find what value they want? Sorry if it is a no-brainer... "

Just take a look at the filing requirements for form 8938. There is variation based on your a U.S/foreign residency, married/single. Generally, the allowance is much higher if you're married and are a foreign resident, (2555 candidate) As obormot suggests, the value of your USS would be $0, as you've taken no distribution. (The same would hold true for any other none Social Security type retirement account)

Nun, the IRS and the London Embassy told me last week that the pension required reporting on 8983 (if threshold met) and that it doesn't need to go on the FBAR, and forms 3520/3520-A and 8833 were not necessary. I didn't ask about PFIC.

If you are going to claim tax deferral on contributions and gains using the tax treaty then many people would agree with the IRS folks at the London Embassy.

If you want to pay the tax as the money goes in you now have to apply the full IRS code.

Sorry for any confusion...I am aware of threshold for my situation.

Just interested in source for what value is being asked for by 8938 for pension. I'm dotting my i's...

Sorry for any confusion...I am aware of threshold for my situation.

Just interested in source for what value is being asked for by 8938 for pension. I'm dotting my i's...

There is a section in the 8938 Instructions concerning Valuing foreign pension plans (It's on Page 6) and includes:
If you received no
distributions during the tax year and
do not know or have reason to know
based on readily accessible
information the fair market value of
your interest as of the last day of the
tax year, use a value of zero as the
maximum value of the asset.

There is a section in the 8938 Instructions concerning Valuing foreign pension plans (It's on Page 6) and includes:
If you received no
distributions during the tax year and
do not know or have reason to know
based on readily accessible
information the fair market value of
your interest as of the last day of the
tax year, use a value of zero as the
maximum value of the asset.

Thank you for pointing this out 

I haven't been reporting my UK private pension on 8938 since it is quite small (<$5k/year) and now I can point to an actual paragraph telling me why this is not necessary.  (I'll now stop looking out for the black helicopters heading my way).

(Note that I do report and pay tax on the pension, just don't do the 8938)

I haven't been reporting my UK private pension on 8938 since it is quite small (<$5k/year) and now I can point to an actual paragraph telling me why this is not necessary.  (I'll now stop looking out for the black helicopters heading my way).

(Note that I do report and pay tax on the pension, just don't do the 8938)

I assume you are not yet receiving distributions (receiving regular pension cheques) from the pension, or your foreign assets are not over $100,000 (MFJ, residing in the US).

I report all pensions (other than State) on 8938 since I know how much I receive in distributions (monthly deposits) each year.

I assume you are not yet receiving distributions (receiving regular pension cheques) from the pension, or your foreign assets are not over $100,000 (MFJ, residing in the US).

I report all pensions (other than State) on 8938 since I know how much I receive in distributions (monthly deposits) each year.

I've been reporting my pension distributions (fixed at £220/month) long before I'd heard of an 8938 (8 years now), on a substitute 1099-R, and my foreign assets have never been anywhere close to $100k, most years under $10k.  Those years when I did exceed $10k in foreign financial assets I filed an FBAR with the Treasury.

....... now I can point to an actual paragraph telling me why this is not necessary. 

Sorry, I didn't want anyone to be mislead.

I would suggest the reason you don't file 8938 is due to the reporting threshold, and has nothing to do with the instructions Anchor pointed out.

If your foreign assets were greater than $100,000 (your threshold) then you would be reporting the distributions from your UK private pension on 8938?

Sorry, I didn't want anyone to be mislead.

I would suggest the reason you don't file 8938 is due to the reporting threshold, and has nothing to do with the instructions Anchor pointed out.

If your foreign assets were greater than $100,000 (your threshold) then you would be reporting the distributions from your UK private pension on 8938?

The instructions say that if you don't know the value of your pension plan at the end of the year then the value is the sum of your annual distributions, and I agree that the value has to be less than $100k in distributions to avoid filing an 8938.

If you have an interest in a
foreign estate, foreign pension plan,
or foreign deferred compensation
plan, the maximum value of your
interest is the fair market value of your
beneficial interest in the assets of the
estate, pension plan, or deferred
compensation plan as of the last day
of the tax year. If you do not know or
have reason know based on readily
accessible information the fair market
value as of the last day of the tax year,
 the maximum value is the fair market
value, determined as of the last day of
the tax year, of the cash and other
property distributed during the tax
year to you as a beneficiary or
participant.

...... the value has to be less than $100k in distributions to avoid filing an 8938.

Agreed, if the pension is your sole foreign asset. (I'm being pedantic), the threshold for 8938, like FBAR, is an aggregate amount. For those of us resident in the UK the thresholds are $200,000 or $300,000 during the year (MFS), or $400,000 or $600,000 during the year (MFJ), and the pension may be but one element of that aggregate.

Agreed, if the pension is your sole foreign asset. (I'm being pedantic), the threshold for 8938, like FBAR, is an aggregate amount. For those of us resident in the UK the thresholds are $200,000 or $300,000 during the year (MFS), or $400,000 or $600,000 during the year (MFJ), and the pension may be but one element of that aggregate.

I agree, and as I said in my post above, my other assets rarely rise above $10k.  However I appreciate you making it absolutely clear to everyone that the $100k reporting threshold, just like the $10k FBAR threshold, is the aggregate of all accounts.

I also appreciate you pointing out that once we are resident in the UK the threshold is ginormous for MFJ.  (for sure, if we did make those thresholds I wouldn't bother trying to file all this stuff myself  )

..... (for sure, if we did make those thresholds I wouldn't bother trying to file all this stuff myself  )

Yes you would. You wouldn't give up that easily!