This post makes me think the answer is yes, since I think 2nd Pillar accounts are "owned and controlled by the account holder", not by the employer or the government.
Is this right?
US citizens often have to file form TD F 90-22.1 (Report of Foreign Bank and Financial Accounts) every year with the Dept. of the Treasury. Clearly this includes bank + brokerage account(s) held in Switzerland, but does a 2nd Pillar retirement account need to be reported on this form?
I have, in my 25 years in Europe, never sent such a form.
If you want to offer your bank account information, then that is (IMO)
up to you
Without distracting from the question re. 2nd Pillar, I recommend US citizens who may not be fully aware of recent changes to take a look at the 2008 document IR-2008-79 , which outlines penalties that can result from not filing the FBAR. Quote: " Civil penalties for a non-willful violation can range up to $10,000 per violation. Civil penalties for a willful violation can range up to the greater of $100,000 or 50 percent of the amount in the account at the time of the violation. Criminal penalties for violating the FBAR requirements while also violating certain other laws can range up to a $500,000 fine or 10 years imprisonment or both. Civil and criminal penalties may be imposed together. "
The point that lacks clarity in the instructions, though, is whether 2nd Pillar retirement accounts fall under the reporting requirements or not. Any informed opinions on this?
Actually I get the opposite impression from that post... http://taxes.about.com/od/preparingy...a/TDF90221.htm
Isn't the 2nd pillar controlled by the Swiss government and your employer? You do not control it; hence perhaps not required to file on the TD F 90-22.1.
It would be good to have a clear view of that from a US/Swiss tax professional.
My tax advisor said I should include it.
I am not sure about the interpretation ... if you leave Switzerland, you can take the 2nd Pillar with you (after paying taxes on it), so maybe that makes it "under your control"? I think these 2nd Pillars are not run by the government or the employer, they are essentially private.
Hi - Did you ever get the correct answer to your question?
"Signatory authority" over the account is the determining factor.
The USA does not recognize the 2nd pillar contributions as "pension" contribution. It is just ordinary income.
Therefore, you do not have "Signatory authority" over your 2nd pillar until you stop employment - that is until your employer pension fund is transferred to a bank account that is restricted. At that point you do have "Signatory authority" - and them you need to file FBAR on this account.
I hope this helps,
Eric
Framing it in terms of signatory authority is nice and clear, thank you.
From what I read about the Swiss banks delivering data to the US tax authorities, 2nd pillar is exempt from this.
so ... are vested benefit accounts (Freizügigkeitskonto) exempt or not???
The IGA (Inter-Governmental Agreement) with the United States that Switzerland "initialed" (whatever the means, could be subject to a national referendum I guess) and which defines the scope of data exchange between Swiss Financial Institutions and the IRS (to be done via the Swiss Government) for FATCA compliance purposes provides an exemption for Swiss Pension Funds.
Financial Institutions don't have to report Swiss Pension Funds to the IRS (rightly so, if Swiss Pension Funds were to get FATCA penalized, the Swiss populace would be up in arms collecting signatures for a possibly a constitutional referendum to impose reciprocal measures).
Regarding Freizügigkeitskonten, I do not see why they should be reported under the TD F 90-22.1 as you have no signature authority over it unless you are departing Switzerland.
Whether the employer administered 2nd pillar should be reported by the individual US Tax Payer in the FATCA form is an open question though.