IRC Section 401(a)(35) was added by the Pension Protection Act of 2006 (PPA) (Public Law 109–280—Aug. 17, 2006). The rules apply to plans holding "publicly traded employer securities" and are therefore not applicable in most closely held ESOPs. If your company is thinly traded, you may be impacted by the regulations. See our Analysis of the IRC Section 401(a)(35) Proposed Regulations for more details.

The IRS published final regulations that are effective on May 19, 2010 and applicable for plan years beginning on or after January 1, 2011: Treasury Regulation [TD 9484] – Diversification Requirements for Certain Defined Contribution Plans