US SB2003

Amends Internal Revenue Code Section 420 to allow employers to transfer "excess health assets" (amounts exceeding 125% of retiree health plan liabilities) from retiree health benefits accounts to pension plans or voluntary employees' beneficiary associations to fund active employee benefits

Excess health asset transfers are excluded from employer gross income, not treated as employer reversions subject to excise tax, and not considered prohibited transactions under ERISA

Creates new Section 401(p) permitting employers to transfer "surplus assets" (amounts exceeding 110% of defined benefit plan liabilities) from defined benefit pension plans to defined contribution plans without tax consequences

Requires all benefits to become nonforfeitable before any transfer occurs, and prohibits reductions to replacement plan benefits for 4 years after the transfer period ends

Effective dates: excess health asset transfers apply to taxable years beginning after December 31, 2024; surplus defined benefit transfers apply to plan years beginning after December 31, 2025