Do 403(b) plans require coverage testing?

403(b) plans are generally designed for certain tax-exempt organizations, such as public schools and non-profit entities. Unlike 401(k) plans, they do not require coverage testing to determine whether a sufficient number of employees are receiving benefits under the plan. Coverage testing is a requirement primarily for 401(k) plans to ensure that the plan does not disproportionately benefit highly compensated employees over non-highly compensated employees. In the case of 403(b) plans, the regulatory framework allows for a simpler compliance structure, making coverage testing unnecessary. Therefore, the conclusion that 403(b) plans do not require coverage testing is correct, reflecting the unique nature of these plans and their regulatory environment.