Which test measured the broadest participation in a retirement plan?

The coverage test is designed to measure whether a retirement plan includes a sufficient number of employees in its broad scope of coverage, particularly focusing on ensuring that a diverse group of employees is eligible to participate in the plan. This test examines the composition of employees engaged in the plan compared to the overall workforce, addressing whether the plan discriminates in favor of highly compensated employees over others.

Through the coverage test, a plan is assessed based on whether it meets minimum participation thresholds for non-highly compensated employees, which is essential for maintaining the tax-favored status of retirement plans. By evaluating both full-time and part-time employees and accounting for different classifications within the workforce, the coverage test captures the widest spectrum of participation across employee demographics. This broad approach ensures that a fair opportunity is provided for participation in the retirement plan, aligning with regulatory requirements and promoting equitable access to retirement benefits.

The other tests, while essential for determining various aspects of plan compliance, do not measure broad participation in the same way. The compensatory test evaluates whether contributions or benefits provided under the plan favor highly compensated employees, while the eligibility and participation tests focus more directly on criteria for individual participation and the amounts contributed, rather than the overall participation breadth among the workforce.