It depends. Did the value during the tax year exceed the threshold amounts for your filing status as outlined below for your situation? See the Form 8938 instructions for more details. The election to defer taxes until distribution does not affect the filing of this form.
"Unmarried taxpayers or married taxpayers filing separate returns. If you are not married or married filing separately, you satisfy the reporting threshold only if the total value of your specified foreign financial assets is more than $50,000 on the last day of the tax year or more than $75,000 at any time during the tax year.
Married taxpayers filing a joint income tax return. If you are married and you and your spouse file a joint income tax return, you satisfy the reporting threshold only if the total value of your specified foreign financial assets is more than $100,000 on the last day of the tax year or more than $150,000 at any time during the tax year."
For the years that you exceeded the thresholds, you need to file the form 8938. The penalty is $10,000 initially and then $10,000 for each 30-day period after IRS notifies you of a failure to file up to a maximum penalty of $50,000. However you can avoid the penalties if you can substantiate an "honest mistake." Here is an extract from the Form 8938 instructions.
"Reasonable Cause Exception: No penalty will be imposed if you fail to file Form 8938 or to disclose one or more specified foreign financial assets on Form 8938 and the failure is due to reasonable cause and not to willful neglect. You must affirmatively show the facts that support a reasonable cause claim. The determination of whether a failure to disclose a specified foreign financial asset on Form 8938 was due to reasonable cause and not due to willful neglect will be determined on a case-by-case basis, taking into account all pertinent facts and circumstances."
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