PART 4204—VARIANCES FOR SALE OF ASSETS Authority: 29 U.S.C. 1302(b)(3), 1384(c). Source: 61 FR 34084, July 1, 1996, unless otherwise noted. Subpart A—General § 4204.1 Purpose and scope. (a) Purpose. (b) Scope. § 4204.2 Definitions. The following terms are defined in § 4001.2 of this chapter: Code, employer, ERISA, IRS, multiemployer plan, PBGC, person, plan, plan administrator, plan sponsor, and plan year. In addition, for purposes of this part: Date of determination Net income after taxes Net tangible assets Purchaser Seller Unfunded vested benefits [61 FR 34084, July 1, 1996, as amended at 86 FR 1270, Jan. 8, 2021] Subpart B—Variance of the Statutory Requirements § 4204.11 Variance of the bond/escrow and sale-contract requirements. (a) General rule. (b) Requests after posting of bond or establishment of escrow. (c) Information required. (d) Limited exemption during pendency of request. (e) Method and date of issuance. [61 FR 34084, July 1, 1996, as amended at 68 FR 61355, Oct. 28, 2003; 90 FR 39328, Aug. 15, 2025] § 4204.12 De minimis The criterion under this section is that the amount of the bond or escrow does not exceed the lesser of $250,000 or two percent of the average total annual contributions made by all employers to the plan, for the purposes of section 304(b)(3)(A) of ERISA and section 431(b)(3)(A) of the Code, for the three most recent plan years ending before the date of determination. [61 FR 34084, July 1, 1996, as amended at 80 FR 55009, Sept. 11, 2015; 86 FR 1270, Jan. 8, 2021] § 4204.13 Net income and net tangible assets tests. (a) General. (1) Net income test. (2) Net tangible assets test. (i) If the purchaser was not obligated to contribute to the plan before the sale, the amount of unfunded vested benefits allocable to the seller under section 4211 (with respect to the purchased operations), as of the date of determination, or (ii) If the purchaser was obligated to contribute to the plan before the sale, the sum of the amount of unfunded vested benefits allocable to the purchaser and to the seller under ERISA section 4211 (with respect to the purchased operations), each as of the date of determination. (b) Special rule when more than one plan is covered by request. (c) Non-applicability of tests in event of purchaser's insolvency. Subpart C—Procedures for Individual and Class Variances or Exemptions § 4204.21 Requests to PBGC for variances and exemptions. (a) Filing of request In general. (2) Method of filing. (b) Who may request. (c) Where to file. (d) Information. (1) The name and address of the plan or plans for which the variance or exemption is being requested, and the telephone number of the plan administrator of each plan. (2) For each plan described in paragraph (d)(1) of this section, the nine-digit Employer Identification Number (EIN) assigned by the IRS to the plan sponsor and the three-digit Plan Identification Number (PN) assigned by the plan sponsor to the plan, and, if different, also the EIN and PN last filed with the PBGC. If an EIN or PN has not been assigned, that should be indicated. (3) The name, address and telephone number of the seller and of its duly authorized representative, if any. (4) The name, address and telephone number of the purchaser and of its duly authorized representative, if any. (5) A full description of each transaction for which the request is being made, including effective date. (6) A statement explaining why the requested variance or exemption would not significantly increase the risk of financial loss to the plan, including evidence, financial or otherwise, that supports that conclusion. (7) When the request for a variance or exemption is filed by the seller alone, a statement signed by the purchaser indicating its intention that section 4204 of ERISA apply to the sale of assets. (8) A statement indicating the amount of the purchaser's bond or escrow required under section 4204(a)(1)(B) of ERISA. (9) The estimated amount of withdrawal liability that the seller would otherwise incur as a result of the sale if section 4204 did not apply to the sale. (10) A certification that a complete copy of the request has been sent to each plan described in paragraph (d)(1) of this section and each collective bargaining representative of the seller's employees by certified mail, return receipt requested. (e) Additional information. (f) Disclosure of information. [61 FR 34084, July 1, 1996, as amended at 68 FR 61355, Oct. 28, 2003; 90 FR 39328, Aug. 15, 2025] § 4204.22 PBGC action on requests. (a) General. (1) Would more effectively or equitably carry out the purposes of title IV of ERISA; and (2) Would not significantly increase the risk of financial loss to the plan. (b) Notice of pendency of request. Federal Register. (c) PBGC decision on request. Federal Register.