Annual Addition

Definition

The total amount credited to a participant’s account for any limitation year. This includes:

  • Employer contributions;
  • Employee contributions; and
  • Forfeitures.

 See Annual Addition Limit

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