Accessing small pension early

The Daughter's Pension Saga:  So, she has already contacted the entity that holds the pension. It took them over a month to respond. Their advice:  seek financial advice. She had asked them point blank if there was a way to get her contributions back. They did not specifically answer the question. They also told her to be sure to read up on her pension in the plan booklet. Unfortunately, she never received a plan booklet so that's not possible. The amount in the pension pot that we are talking about is probably less than the cost of the fees for the financial advice (or close!).

The Daughter worked for several months for a local shop. At one point she became "eligible" for their DC Workplace pension. The total amount she contributed was between £200 and £250 pounds, total. That was matched by her employer. She was not given an option to ~not~ participate in this scheme, they just took the money out of her paychecks and put it in the account.  At this point she does not intend to live in the UK again, ever, once we leave in a few months. She would rather have her £200 to help defray her moving costs. She  doesn't care if she doesn't get the full amount of the pot now - she just wants the part she contributed.  Does anyone know of a way that she can get that money back? She is unemployed with no income at all since last fall.

Failing that, is there a reputable US pension scheme (like Fidelity) that she could transfer the money into, so that she at least has her "pension" in the USA, that won't eat up the entire amount from fees? She says she's done some reading and it looks as if she cannot transfer it into a USA 401K, but perhaps there is something else?

According to the pension advisory service refunds of contributions made if you have been in the plan for less than 2 years depends on the plan scheme so you really do need to get the plan details. It looks like they have a toll free number to call.

https://www.pensionsadvisoryservice.org.uk/about-pensions/when-things-change/leaving-your-pension-scheme/taking-a-refund

You may be able to receive a refund of your contributions if you leave a workplace pension scheme within two years of joining

Thanks. Unfortunately, it's a DC pension, not a DB pension, so I assume it's locked up here in the UK for the next thirty-something years, unless we can find somewhere in the USA to transfer it to. 

Thanks. Unfortunately, it's a DC pension, not a DB pension, so I assume it's locked up here in the UK for the next thirty-something years, unless we can find somewhere in the USA to transfer it to. 

Sorry, you are correct. From that link I posted it looks like DC pension rules changed a few years back.

As of 1 October 2015, members of occupational defined contribution pension schemes will no longer be entitled to short-service refunds if they leave employment (or opt out) with less than two years qualifying service.

The pension rules have been changing rapidly over the last 3 years, including required contribution and upping the percentages annually.  It’s a good thing overall but annoying in this circumstance.

The pension rules have been changing rapidly over the last 3 years, including required contribution and upping the percentages annually.  It’s a good thing overall but annoying in this circumstance.

I’m out of touch unfortunately by about 40 years. When I were a lad my wife and I quit our first jobs after 20 months and were able to withdraw our contributions, paying tax plus a 10% penalty as we wanted it towards a deposit on a house.

The pension rules have been changing rapidly over the last 3 years, including required contribution and upping the percentages annually.  It’s a good thing overall but annoying in this circumstance.

Yeah, really. And it's not like she had a choice. 

At least she has an employer match in there, and eventually/hopefully someday she will get that money back and whatever piddly interest it has earned in the meantime.

SO, back to transferring it to the USA. Anyone have any actual clue about a broker, like Fidelity, in the USA that would accept a transfer of such a small amount, and still meet the UK's requirement that it goes to a QROPS? The HMRC website only lists two, which seem to be employer specific. (We will, of course, contact Fidelity for advice.)

Yeah, really. And it's not like she had a choice. 

At least she has an employer match in there, and eventually/hopefully someday she will get that money back and whatever piddly interest it has earned in the meantime.

SO, back to transferring it to the USA. Anyone have any actual clue about a broker, like Fidelity, in the USA that would accept a transfer of such a small amount, and still meet the UK's requirement that it goes to a QROPS? The HMRC website only lists two, which seem to be employer specific. (We will, of course, contact Fidelity for advice.)

Your daughter had a statutory right to opt out. She could have opted out and would not have had the investment.  US domestic law does not permit a rollover from a non-US qualified plan to a US qualified plan. It is not possible. 

Your daughter will continue to file Schedule B, Part III each year.  If appropriate, she will also file an FBAR & Form 8938.  Your daughter can withdraw all the value of the investments at age 55.

She wasn't told she had an option to opt-out. The money just came out of her pay.

She has no other income, so she'll be thrilled to hear she has to file Schedule B and potentially a FBAR for the next 30 years for £250. (Not.)

EDIT:  Well, she's off the hook for some of that reporting. We'll be back in the USA in a few months. At that point: The monetary thresholds that must be met before an individual is required to submit one of these forms differ depending upon the form and, in certain cases, the individual’s status. For example, the obligation to file an FBAR is triggered when an individual has foreign bank accounts with an aggregate high balance of $10,000 at any point during the tax year. [Does not apply] The obligation to file Form 8938, however, depends on the filing status of the individual (because Form 8938 is attached to, and part of, a Form 1040 income tax return) and whether the individual resides in the United States or abroad. An unmarried individual living in the United States will have an obligation to file Form 8938 if her total specified foreign assets exceed $50,000 on the last day of the tax year ....[does not apply]. Within this range are additional reporting thresholds for single taxpayers residing abroad and married taxpayers residing in the United States. Finally, Form 3520 has different reporting triggers depending on the nature of the foreign asset. A U.S. person must file Form 3520 to report a foreign gift or distribution from a foreign estate that exceeds $100,000. Form 3520 must also be filed by a U.S. person to report the creation of a foreign trust, ownership of a foreign trust, transfers of money or property to a foreign trust, or distributions from a foreign trust.

https://www.cpajournal.com/2020/03/03/reporting-foreign-retirement-plans-on-required-information-returns/

Now to sort out form 3520, which I think is not needed because the employer matched to the pence the amount she contributed. So rather than this being considered a grantor trust, it's an employees trust and not reportable on form 3520. (I think.) She would only file the form 3520 when she took money out of the account when she retired. If she even remembers at that point that she has the account.