Employer wants to merge its money purchase pension plan into its 401(k) Plan.
The money purchase pension plan contains several life insurance policies.
Is there any reason these can't be transferred to the 401(k) plan when the plans merge?

There's no statutory prohibition, but either the 401(k) document, or the recordkeeper, or both, may not allow it. A lot of TPA's won't administer 401(k) plans with life insurance.