Commissioner v. Keystone Consolidated Industries, Inc.

delivered the opinion of the Court.†

In this case, we are concerned with the legality of an employer’s contributions of unencumbered property to a defined benefit pension plan. Specifically, we must address the *154question 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…