pre-funded employer contributions

[rlb64]

Employer contributes profit sharing contributions during a plan year into a holding account earning a return until the contributions are allocated at year end. If the plan allocates earnings on pre-funded employer contributions as employer contributions instead of ratably across assets, is the allocation an annual addition subject to 415?

[TPAMan]

If the holding account is not inside the plan trust, then the amount contributed, including earnings, would be subject to annual additions. If the holding account is inside the trust, check the plan document for proper allocation of earnings.