154
Opinion of the Court
question whether such a contribution, when applied to the employer's funding obligation, is a prohibited "sale or exchange" under 26 U. S. C. § 4975 so that the employer thereby incurs the substantial excise taxes imposed by the statute.
I
A "defined benefit pension plan," as its name implies, is one where the employee, upon retirement, is entitled to a fixed periodic payment. The size of that payment usually depends upon prior salary and years of service. The more common "defined contribution pension plan," in contrast, is typically one where the employer contributes a percentage of payroll or profits to individual employee accounts. Upon retirement, the employee is entitled to the funds in his account. See 29 U. S. C. §§ 1002(34) and (35).
If either type of plan qualifies for favorable tax treatment, the employer, for income tax purposes, may deduct its current contributions to the plan; the retiree, however, is not taxed until he receives payment from the plan. See 26 U. S. C. §§ 402(a)(1) and 404(a)(1).
II
The facts that are pertinent for resolving the present litigation are not in dispute. During its taxable years ended June 30, 1983, through June 30, 1988, inclusive, respondent Keystone Consolidated Industries, Inc., a Delaware corporation with principal place of business in Dallas, Tex., maintained several tax-qualified defined benefit pension plans. These were subject to the minimum funding requirements prescribed by § 302 of the Employee Retirement Income Security Act of 1974 (ERISA), Pub. L. 93-406, § 302, 88 Stat. 869, as amended, 29 U. S. C. § 1082. See also 26 U. S. C. § 412. Respondent funded the plans by contributions to the Keystone Consolidated Master Pension Trust.
On March 8, 1983, respondent contributed to the Pension Trust five truck terminals having a stated fair market value
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