Now that Congress has passed and President Bush has signed into law the Pension Protection Act of 2006 (the “Act”), with its comprehensive reform of the law governing tax-qualified retirement plans, it is appropriate to examine the provisions of the Act that impact employee stock ownership plans (“ESOPs”). Although certain components of the Act will require ESOP plan amendments and modifications in plan operations, none of the provisions represents a cutback in the important tax incentives that exist for ESOPs. This Client Advisory summarizes the ESOP-related components of the Act.