Defined Contribution Pension Plan

pianoplayer · Post by **pianoplayer** » Sat Nov 29, 2014 7:11 pm

I have read in two places here that employer pension plans should not be included in FBar. I would like to know the rationale behind that, or source if there is any. I have such a plan which is a Defined Contribution plan, and nobody contributes to it anymore. It only accumulates interest. I think I don't have much control over it. Even the account number is a general number for all the employees. But I can transfer it to a LIRA if I decide to, however I have no such intention. I like to know if I can safely remove it from my FBar next year. Thank you.

nelsona · Post by **nelsona** » Sat Nov 29, 2014 10:38 pm

Only once you convert it to a LIRA would it become a financial ACCOUNT over which you have authority.

pianoplayer · Post by **pianoplayer** » Sun Nov 30, 2014 4:47 am

That is great, thank you! So then if the total sum of all my other accounts is below 10000,I do not need to file FBar even if the sum would be more than 10000 including this account. I have two more questions:

1- Is this type of account considered to be what they call "RPP"?
2- What are the reporting requirements for this type of account? 8833 (to defer interest income), 8939, or anything else?

pianoplayer · Post by **pianoplayer** » Sun Nov 30, 2014 2:43 pm

Ok, it looks like this is an RPP account, and 8938 is needed if threshold is met. BUT unlike what I read here, 8833 might be needed for deferal of interest income, from tax year 2013. I heard it from a CPA from one of the "major" accounting firms. He said that this form was not needed previously, but from tax year 2013 it needs to be filed for defering interest income. Anybody else has heard anything to that effect.

nelsona · Post by **nelsona** » Sun Nov 30, 2014 9:15 pm

1. Yes, in CRA terms
2. There is never any need for an 8833 for these RPPs. There is no such thing as "interest income" from these accounts, anyways.
As to 8983, read the instructions and this will lt you know. But no 8833.

pianoplayer · Post by **pianoplayer** » Mon Dec 01, 2014 4:03 am

Thanks Nelsona, but I should say I am confused now
1- You mentioned there is no such thing as interest income. But the money in the account is growing from the investments the employer is doing. The employer sends statements every year cleary indicating the amount of growth, which they call it "credited interest". Doesn't this growth value require deferral of taxation?
2- Also, could you please clarify why this account is considered an "Account" in 8939 context, but is not an "Account" in FBar context?

nelsona · Post by **nelsona** » Mon Dec 01, 2014 10:43 am

1. It's not "interest", sincee it is in a pension. Besides, I hop[e they are giving you more than "interest" in that pension, or they are cheating you. In any event, internal pension income is not taxable in US.
2. 8938 is for foreign ASSETS, not strictly foreign ACCOUNTS.

Please read more on threads already well- developed on these topics.

Happy browsing.