Sec. 201 Transfer of surplus defined benefit plan assets to defined contribution plan
“(p) Transfer of surplus defined benefit plan assets to defined contribution plan
“(1) In general
“(A) Transfer permitted—If an employer maintaining a defined benefit plan establishes or maintains a defined contribution plan which would be a qualified replacement plan (as defined in section 4980(d)(2)) with respect to the defined benefit plan but for the fact that the defined benefit plan is not terminated, subject to the requirements of paragraphs (3) and (4), any surplus assets of the defined benefit plan may be transferred to the defined contribution plan.
“(B) Treatment of amount transferred—In the case of the transfer of any amount under subparagraph (A)—
“(i) such amount shall not be includible in the gross income of the employer,
“(ii) no deduction shall be allowable with respect to such transfer, and
“(iii) such transfer shall not be treated as an employer reversion for purposes of section 4980.
“(2) Surplus assets—For purposes of this subsection, the term surplus assets means the excess of assets of the defined benefit plan over an amount equal to 110 percent of the value of plan liabilities used to determine premiums imposed under title IV of the Employee Retirement Income Security Act of 1974 for the plan year of the transfer.
“(3) Vesting of benefits—The requirements of this paragraph are met if all benefits under the defined benefit plan become nonforfeitable in the same manner which would be required if the plan had terminated immediately before the transfer (or in the case of a participant who separated during the 1-year period ending on the date of the transfer, immediately before such separation).
“(4) No reduction in benefits—The requirements of this paragraph are met if, during the period beginning with the year of the transfer and ending 4 plan years after the last plan year during which the replacement plan is funded by the transfer, no benefits under the replacement plan are reduced.”
“(e) Transfers of surplus defined benefit plan assets—A pension plan shall not be treated as failing to meet the requirements of this subchapter solely by reason of any transfer made as permitted by section 401(p) of the Internal Revenue Code of 1986.”
“(5) Transfers of surplus defined benefit plan assets—Rules similar to the rules of paragraph (4) shall apply in the case of any transfer by an employee pension benefit plan of surplus defined benefit plan assets pursuant to section 401(p) of the Internal Revenue Code of 1986.”