Definition
An Annual Addition is the total amount credited to a participant’s account for any limitation year. This includes:
- Employer contributions;
- Employee contributions; and
- Forfeitures.
Referring Cite
Treas. Reg. § 1.415(c)-1(b)
Additional Helpful Information
- Excess contributions , excess aggregate contributions are included in the annual addition amount, even if distributed
- The direct transfer of a benefit or employee contributions from a qualified plan to a defined contribution plan does not give rise to an annual addition.
- Annual addition includes employer contributions credited to the participant’s account for the limitation year
- Amounts not treated as annual additions :
- Certain restorations of accrued benefits.
- Catch-up contributions.
- Restorative payments.
- Excess deferrals.
- Rollover contributions
- Loan repayments
