I'm new to administering ESOPs and I have a general question. The ESOP has investments in mutual funds and some GNMA bonds. I'm wondering when it comes to allocating earnings on these non ER stock is the allocation made on a participant's total account including the ER Stock or account minus the ER Stock? I'm going to read the document carefully to see if it specifically addresses this but thought someone who administers these on a regular basis could give me some guidance.

This should be addressed in the plan document. Generally these earnings are based on one of the methods you suggest.