Which of the following statements about coverage rules for qualified plans is correct?

The statement that retirement plans can cover any portion of the workforce if they meet specific tests is correct because qualified retirement plans must adhere to certain coverage rules as mandated by the Internal Revenue Service (IRS). These rules are designed to ensure that plans do not disproportionately favor highly compensated employees over other employees.

For a qualified plan to be compliant, it must meet minimum coverage requirements, often assessed through specific tests, such as the percentage test or the ratio test. As long as the plan meets these tests, it is permissible to design a plan that covers a select group within the workforce, allowing employers flexibility in determining eligibility while still satisfying legal requirements.

This approach balances the need for employers to attract and retain key talent with the necessity of fair coverage for employees across various compensation levels. Therefore, the ability to cover any portion of the workforce, provided that established tests are met, is a fundamental aspect of the rules governing qualified plans.