I've read the older Reddit posts that all came to the conclusion that Japanese nenkin is not FBAR-reportable by virtue of it being a Social Security-like program where the person holds no signature authority over an individual account. However, what do you make of this?
https://fbardirect.com/fbar/japan
"Japanese Kosei Nenkin (Employees Pension Insurance) and iDeCo (individual defined contribution) accounts are reportable on FBAR. The US-Japan tax treaty (Article 17) provides limited relief for pension distributions."
The TaxesForExpats tax preparation website also asserts the same:
"Most pension systems are structured under a three-pillar model that separates retirement savings by function:
Pillar 1 – Government-run pension programs providing basic, poverty-reducing coverage (e.g., public Social Security).
Pillar 2 – Employer-sponsored or mandatory occupational pensions (e.g., pension funds or defined-contribution plans).
Pillar 3 – Voluntary, private retirement savings (e.g., personal savings plans or private insurance policies).
This question specifically refers to employer contributions made to Pillar 2–type pension plans on your behalf, typically mandatory or negotiated contributions made before taxes are withheld. These contributions are usually reflected on your pay slip or salary statement. The IRS considers employer contributions part of your current-year taxable income, unless a tax treaty provides a specific exemption (e.g., with the UK, Belgium, or the Netherlands). If your employer is required to contribute a percentage of your salary into a workplace pension plan, these contributions should be reported in response to this question. For example, employer contributions to Australian Superannuation plans are mandatory and need to be reported because they are treated as deferred compensation in Australia, but not allowed for a deferral in the U.S.
Important notes:
DO NOT INCLUDE YOUR CONTRIBUTIONS to the Social Security system (Pillar 1). That will be addressed in a separate question.
Employer contributions to the Social Security system (Pillar 1) are not reported or counted in any way by the IRS.
And this:
"Please note – any type of employer contributions to your pension plan must be reported – whether it is compulsory or voluntary.
Employer contributions to employee foreign pension plan are treated as earnings not allowed for deferral on U.S. tax returns
Examples of various country-specific retirement plans or other forms of deferred compensation include (these are just examples – the list is not comprehensive, it might be called something else in your country. If you are unsure – check with us):
- Pillar 2 – Switzerland, Estonia, Sweden, Poland
- Superannuation – Australia
- KiwiSaver – New Zealand
- Provident Fund – Singapore, Hong Kong, India
- Prestaciones Sociales – Venezuela"
This seems to be a recent and critical revelation with major ramifications for FBAR reporting requirements. Can u/starkimpossibility or u/ixampl or u/shrubbery_herring shed light on and reconcile this? It seems to fly in the face of the IRS guidance, which is opposite of the above assertions:
https://www.irs.gov/businesses/comparison-of-form-8938-and-fbar-requirements
Namely, based on IRS guidance, Social Security-type program benefits provided by a foreign government are neither FBAR not FATCA-reportable.
by PencilMeInPenguin