This legislation seeks to amend the Employee Retirement Income Security Act of 1974 (ERISA) and the Internal Revenue Code of 1986. Its primary goal is to enable participants in Employee Stock Ownership Plans (ESOPs) to fully realize the benefits of their ownership stake while also maximizing their contributions to other defined contribution retirement plans. Current law often prevents ESOP employees from making full use of their defined contribution plans because the growth in their ESOP balance can cause their total contributions to exceed annual caps, hindering diversification of retirement savings. To address these issues, the bill introduces several key changes to how contribution limits are applied. For purposes of Internal Revenue Code Section 404, which governs the deductibility of employer contributions, it specifies that contributions of employer stock and contributions made to repay loans used to acquire employer securities will not be counted towards the employer contribution limits for ESOPs. Furthermore, the limitations under Section 404 will be applied separately to an ESOP and any other defined contribution plan offered by the same employer, preventing combined limits from restricting savings. Regarding Internal Revenue Code Section 415, which sets limits on benefits and contributions, the bill clarifies that certain items will not be considered "annual additions" for ESOPs. Specifically, employer contributions of stock and contributions made to repay ESOP acquisition loans will be excluded from the annual additions calculation. Additionally, forfeitures allocated to accounts under an ESOP will no longer be taken into account as annual additions. These amendments are designed to ensure that ESOP participants can fully save for retirement in diverse plans without being penalized by the success or structure of their ESOP.