nun

It's not possible to move UK pensions to the US and they are protected from US taxation before you take income from them by the tax treaty. However, if you think a QROPS might be a good idea it's probably best to do the transfer before you become a US tax payer. However, I have serious reservations about the value of the QROPS I've seen, particularly with the liberalization of UK pension regulations.

For other investments exactly what you do will depend on circumstances like how much capital gains you might have. However, many banks and brokerages will restrict your ability to trade if you have a foreign address so for convenience it's good to bring as much of you money to the US as you can.

BunnyGirl

I've taken a look at QROPS and I really don't understand the benefits. Given that it's such a small frozen pension I'm probably just going to leave it in the UK.

As our goal is to remain permenantly in the US, I'd planned to throw as much as I could into a 401k when I'm working!

nun

The QROPS is sold to UK expats as a way to access frozen pensions and have more investment choices, but those "advantages" are greatly reduced by UK's liberalization of its pension regulations. There are usually high fees for QROPS and I basically think they are often a rip off. There were always dubious for US tax payers, but now there are some that are being marketed to US tax payers as they claim that they will be able to avoid US tax on the lump-sum distributions. That might be true, but they are still risky and expensive IMHO.

You have lots of ways to save for retirement in the USA. The 401k is a good one as is the ROTH IRA. Don't forget that saving and investing on your own is also necessary to build up some financial independence. For the personal investor the US is probably the most convenient place. When you arrive look into opening an account with companies like Vanguard, Fidelity or Charles Schwab. You can buy mutual funds easily and the expenses and fees can be very low.

JAJ

In theory maybe, however in practice the IRS do not routinely enforce this in everyday cases. Most people who unknowingly hold investments that might be construed of this type pay tax on dividends and capital gains as normal and are generally not challenged on this.

Although for the long term, on the basis of not looking for trouble, it would usually be advised to divest of anything that might be seen as a PFIC at some time in the future.