McDermott Will & Emory has a summary of the provisions for non-U.S. retirement plans in the allegedly-final FATCA regulations. While the regulations for banks provide incomplete protection for U.S. persons abroad by forbidding only “local FFIs” and not other categories of FFIs from discriminating against us, the regulations applying to retirement plans are even worse.
Narrow Participation Retirement Plans. A non-U.S. retirement plan established to provide retirement, disability and/or death benefits for its current or former employees and designated beneficiaries will be exempt from FATCA if these qualifications are met:
- The plan has fewer than 50 participants.
- The plan is sponsored by one or more employers that are not investment entities or passive non-financial foreign entities.
- The plan is subject to government regulation and provides annual information reporting about its beneficiaries to the relevant tax authorities in its home country.
- Participants not resident in the plan’s home country are not entitled to more than 20 percent of the plan’s assets.
- Employee and employer contributions to the plan (other than transfers from certain retirement savings accounts or other exempt retirement plans) are limited by reference to earned income and compensation, respectively.