Which of the following entities could utilize a tax-sheltered annuity plan?

A tax-sheltered annuity plan, often referred to as a 403(b) plan, is specifically designed to benefit certain types of entities under the Internal Revenue Code. Public schools and non-profit organizations fall into the category of eligible institutions that can offer such plans to their employees.

Public schools, as governmental entities, are specifically mentioned in Section 403(b) of the IRS code. These institutions provide their employees with opportunities for tax-deferred savings through annuity contracts or mutual funds, allowing educators and school staff to save for retirement while reducing their taxable income.

Non-profit organizations, which typically hold tax-exempt status under IRS rules, can also set up tax-sheltered annuity plans for their staff. This facilitates a similar retirement savings opportunity, promoting long-term asset growth without immediate tax implications.

While private companies can offer different retirement plans like 401(k)s, they do not qualify for 403(b) plans. Thus, those familiar with retirement planning can directly see that both public schools and non-profit organizations are aligned with the provisions that allow them to provide tax-sheltered annuities, making the combined option of public schools and non-profit organizations the correct answer.