itonewbie -- My understanding of the cited statute is that it means Form 8833 (Treaty-Based Return Position Disclosure) need not be completed.   However, I'm not confident that it likewise means that the income need not be reported on line 4c, followed-up with a zero on line 4d. 

I realize that as far as tax consequences go, it is moot issue.  However, in the case I'm working on, the pension is significant (US$40,000).  The pension income might have an impact on eligibility for Medicaid, SCHIP, and/or Obamacare premium discounts (tax credits), as some untaxed income sources (SS, muni bonds, and foreign income) are included in the formula for Modified AGI to determine eligibility for benefits.  (If this pension were received from the US government instead of the of foreign government, it would be taxable income.)