Exempt retirement plans

FATCA

Is a Broad Participation Retirement Fund or a Narrow Participation Retirement Fund or a Pension Fund of a Governmental Entity, International Organisation or Central Bank

The term “Broad Participation Retirement Fund” means a fund established to provide retirement, disability, or death benefits, or any combination thereof, to beneficiaries that are current or former employees (or persons designated by such employees) of one or more employers in consideration for services rendered, provided that the fund:

a) does not have a single beneficiary with a right to more than five per cent of the fund’s assets;

b) is subject to government regulation and provides information reporting to the tax authorities; and

c) satisfies at least one of the following requirements:

i) the fund is generally exempt from tax on investment income, or taxation of such income is deferred or taxed at a reduced rate, due to its status as a retirement or pension plan;

ii) the fund receives at least 50% of its total contributions or from retirement and pension accounts from the sponsoring employers;

iii) distributions or withdrawals from the fund are allowed only upon the occurrence of specified events related to retirement, disability, or death (except rollover distributions to other retirement funds or retirement and pension accounts, or penalties apply to distributions or withdrawals made before such specified events; or iv) contributions (other than certain permitted make-up contributions) by employees to the fund are limited by reference to earned income of the employee or may not exceed USD 50 000 annually, applying the rules set forth for account aggregation and currency translation.

The term “Narrow Participation Retirement Fund” means a fund established to provide retirement, disability, or death benefits to beneficiaries that are current or former employees (or persons designated by such employees) of one or more employers in consideration for services rendered, provided that:

a) the fund has fewer than 50 participants;

b) the fund is sponsored by one or more employers that are not Investment Entities or Passive NFEs;

c) the employee and employer contributions to the fund (other than transfers of assets from retirement and pension accounts are limited by reference to earned income and compensation of the employee, respectively;

d) participants that are not residents of the jurisdiction in which the fund is established are not entitled to more than 20% of the fund’s assets; and e) the fund is subject to government regulation and provides information reporting to the tax authorities.

The term “Pension Fund of a Governmental Entity, International Organisation or Central Bank” means a fund established by a Governmental Entity, International Organisation or Central Bank to provide retirement, disability, or death benefits to beneficiaries or participants that are current or former employees (or persons designated by such employees), or that are not current or former employees, if the benefits provided to such beneficiaries or participants are in consideration of personal services performed for the Governmental Entity, International Organisation or Central Bank.

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