Forgot I'd started this thread. I moved to the US in 2023, so I'm now looking at my first year of filing US taxes. Nightmare.
Basically, I have found that searching for this tends to bring up accountancy websites who form an opinion that Kiwisaver is a foreign trust and 3520 and/or 3520A must be filed. In addition, the funds that Kiwisaver invests in may be considered PFICs triggering form 8621, which looks like a complicated form to complete and may also mean that Kiwisaver gains are taxed punitively.
It appears that the IRS created an exemption for forms 3520/3520a for foreign trusts that are formed for the purpose of retirement saving. See section 5.03 of Rev. Proc 2020-17 https://www.irs.gov/pub/irs-drop/rp-20-17.pdf. However, it appears that Kiwisaver does not technically meet all of those criteria, as (1) there is not a contribution limit that I'm aware of and (2) individuals can make contributions from non-employment sources. So it appears Kiwisaver does not match the criteria of 5.03(3) and 5.04(4).
There are good examples of this type of analysis here: https://www.nzustax.com/lets-take-a-deep-dive-into-kiwisaver/ and here https://cloudtax.co.nz/articles/10/08/20/kiwisaver-and-us-tax
But these articles are all written by people who want expat business, and in my view there's a clear motivation for them to explain how complicated things are in order to encourage people to use their services.
Part of the claim is that the US-NZ tax treaty does not deal with Kiwisaver. But I think it does. Looking at the US-NZ tax treaty for pensions, it says:
-- https://www.irs.gov/pub/irs-trty/newzld.pdf
So what's the definition of a pension? In 2008 the US-NZ tax treaty was updated to with a new protocol, which includes a definition of pensions:
-- https://home.treasury.gov/system/files/131/Treaty-NewZealand-Protocol-12-1-2008.pdf
There is an additional technical explanation document which was published alongside the 2008 protocol, which states:
-- https://home.treasury.gov/system/files/131/Treaty-NewZealand-Protocol-TE-11-6-2009.pdf
So my read of this is:
1. pension funds established in a state (NZ or US) are only taxable in the state (as per 1982 tax treaty)
2. Kiwisaver is explicitly defined as a pension fund in the 2008 protocol and technical explanation documents.
Seems pretty clear to me.
At the moment, although I am still researching this, I am intending to declare my Kiwisaver on FBAR and form 8938 (so I will still be fully disclosing my global financial position) but not complete forms 3520/3520 or go down the 8621 PFIC rabbit hole because I believe the US-NZ tax treaty explicitly protects Kiwisaver from taxation by the US.