Assistance with understanding of PFIC rules

[getonyourfeetmusic]

I am an expat in a country where pension agreements are not specifically qualified under any tax treaty with USA. I am trying to understand if these two situations will be interpreted as PFICs or not:

1. Pension plan with automatic contributions from my employer and zero contributions from me. Pension manager is selected by my employer and they cover the fees and I am allowed to choose between a few different fund options, but am not allowed to contribute nor withdraw funds. Also, starting this year a new rule has just been put into place allowing me to move my funds to another fund manager, fee still covered by my employer. (Still cannot contribute or withdraw funds myself, nor control how much funds my employer is contributing.) Is this a PFIC with associated reporting requirements? Was it so before the new rule was put into place?
2. A private pension is offered funded 100% by personal funds and tax is deferred until withdrawal. Funds cannot be withdrawn until retirement age. I have found a fund manager that will allow me to contribute to this pension with no fees associated with the account itself and i am able to select individual stocks on local stock market. If I avoid mutual funds and ETFs - purchase only individual listed shares, would this pension be considered a PFIC?

Thanks in advance for any guidance!

 

[eee27]

@getonyourfeetmusic Situation 1 sounds similar to Australian Superannuation funds. From what I've found when looking into those, if there's no published IRS determination, the best you can do is guess the rules. Professional opinion seems to agree that the key factor is whether it's counts as a Grantor Trust. If your employer is making all the contributions, and you have limited control, it's probably an Employee Benefits trust, and you're OK.

This article is good reading. I think the concepts in it apply to your situation, though the specifics will be different.

"How Does Superannuation Impact Your US Expatriate Tax Return?" https://www.greenbacktaxservices.com/blog/australia-superannuation-us-taxation/

 

[quasar92]

@getonyourfeetmusic For #2, if you only buy individual stocks you’ll be fine. This is the situation, for example, with UK ISAs. IRS doesn’t see it as a pension, no US tax advantages, but still get the UK tax advantages. Nothing to do with the treaty (which exists but doesn’t cover ISAs).