Cite as: 508 U. S. 152 (1993)
Opinion of the Court
were unencumbered and not overvalued at the times of their respective transfers. There were exclusive sales-listing agreements respondent had made with respect to two of the truck terminals; these agreements called for sales commissions. The presence of this requirement demonstrates that it is neither easy nor costless to dispose of such properties. The Chicago truck terminal, for example, was not sold for 31/2 years after it was listed for sale by the Pension Trust.
These problems are not solved, as the Court of Appeals suggested, by the mere imposition of excise taxes by § 4971. It is § 4975 that prevents the abuses.
C
We do not agree with the Court of Appeals' conclusion that § 4975(f)(3) limits the meaning of "sale or exchange," as that phrase appears in § 4975(c)(1)(A). Section 4975(f)(3) states that a transfer of property "by a disqualified person to a plan shall be treated as a sale or exchange if the property is subject to a mortgage or similar lien." The Court of Appeals read this language as implying that unless property "is encumbered by a mortgage or lien, a transfer of property is not to be treated as if it were a sale or exchange." 951 F. 2d, at 78. We feel that by this language Congress intended § 4975(f)(3) to expand, not limit, the scope of the prohibited-transaction provision. It extends the reach of "sale or exchange" in § 4975(c)(1)(A) to include contributions of encumbered property that do not satisfy funding obligations. See H. R. Conf. Rep. No. 93-1280, p. 307 (1974). Congress intended by § 4975(f)(3) to provide additional protection, not to limit the protection already provided by § 4975(c)(1)(A).2
2 Such expanded coverage is illustrated by the following example. An employer with no outstanding funding obligations wishes to contribute property to a pension fund to reward its employees for an especially productive year of service. Under our analysis, the property contribution is permissible if the property is unencumbered, because it will not be "exchanged" for a diminution in funding obligations and therefore does not
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