PLANADVISER - July/August 2021 - 7

under the free exercise clause of the
First Amendment. The high court said
the department's policy discriminated
against otherwise eligible recipients
by disqualifying them from a public
benefit solely because of their religious
character and, in doing so, imposed a
penalty on the free exercise of religion.
FINRA Project Examines How
Regulators Can Support Diversity
In late April,
the Financial
remote services a permanent feature
of FINRA's testing approach, even after
the COVID-19 pandemic ends.
Industry
Regulatory Authority (FINRA) issued
a formal request for comments from
broker/dealers (B/Ds) and financial
advisers on supporting diversity, equity
and inclusion (DEI) in the financial
services industry.
As FINRA stated at the time, in
Regulatory Notice 21-17, its oversight
of the B/D industry is based on, and
limited by, its statutory mandates and
authority, which focus on investor
protection and market integrity.
Furthermore, agencies
such as
the
U.S. Equal Employment Opportunity
Commission (EEOC) and its state
and local counterparts are focused
directly on discrimination issues in
the workplace.
Nevertheless, FINRA noted, regulatory
organizations such as itself " have
an opportunity to evaluate and understand
whether their rules and regulatory
actions have [an] unintended
disparate impact on those within the
industries they regulate. "
The comment period detailed in
Regulatory Notice 21-17 ended in
the last week of June, and the FINRA
website now includes several dozen
comment letters filed by the likes of the
Insured Retirement Institute (IRI) and
the American Council of Life Insurers
(ACLI), state governments, individual
investment firms and single actors. For
their part, the IRI and ACLI filed joint
comments voicing support for FINRA's
consideration of this issue.
Suggestions from the industry
eliminating
include
the
180-day
enforced waiting period triggered
by a third failed " top off " examination-the
second step required for
those pursuing a license to sell securities;
involving community colleges
in the licensing process; and making
Alabama the Latest to Adopt
NAIC Annuity Suitability Standard
The Alabama Department of Insurance
has finalized key revisions to the
state's Insurance Regulation No. 137,
which sets forth conflict of interest
mitigation requirements concerning
the suitability of the sale of annuities.
The revisions make Alabama's suitability
regulation substantially similar
to the most recent revisions of the Suitability
in Annuity Transactions Model
Regulation developed by the National
Association of Insurance Commissioners
(NAIC). The state's revisions
take effect this coming January 1.
This development means Alabama
is now the 13th state to embrace the
model suitability framework the NAIC
finalized early last year. By way of background,
the NAIC is the country's standard-setting
and regulatory support
organization created and governed by
the chief insurance regulators from
the 50 states, the District of Columbia
and five U.S. territories. Through the
NAIC, state insurance regulators
establish standards and best practices,
conduct peer reviews, and coordinate
their regulatory oversight.
IRS Updates Employee Plans
Compliance Resolution System
The IRS has issued Revenue Procedure
(Rev. Pro.) 2021-30, updating its
comprehensive system of correction
programs for sponsors of retirement
plans. The Employee Plans Compliance
Resolution
System
(EPCRS)
permits plan sponsors to correct plan
and operational failures so they may
keep providing their workers with
retirement benefits on a tax-favored
basis. The components of EPCRS are
the self-correction program (SCP),
the voluntary correction program
(VCP) and the audit closing agreement
program (audit CAP).
The new revenue procedure updates
Rev. Pro. 2019-19, primarily to: expand
guidance on the recoupment of overpayments
of defined benefit (DB) plan
benefits; eliminate the anonymous
" ... the Supreme
Court held that
the department
violated a
church's rights
under the free
exercise clause
of the First
Amendment. "
submission procedure under the VCP,
effective this coming January 1; and
add an anonymous, no-fee, VCP presubmission
conference
procedure,
also
effective on January 1. Further,
it extends the end of the SCP correction
period for significant failures by
one year-this thereby also extends
the safe harbor correction method for
employee elective deferral failures
lasting more than three months but not
beyond the extended SCP correction
period for significant failures; expands
the ability of a plan sponsor to correct
an operational failure under the SCP
by plan amendment; and extends by
three years-from December 31, 2020,
to December 31, 2023-the sunset of
the safe harbor correction method
available when sponsors of 401(k) or
403(b) plans with an automatic contribution
feature miss making an eligible
employee's elective deferrals.
Correction of Overpayments
By DB Plans
The IRS says previous revenue procedures
clarified the permissible
methods for correcting overpayments
under the Employee Plans Compliance
Resolution System (EPCRS). Depending
on the facts and circumstances, a
correction may not need to include
requesting that plan participants and
beneficiaries return overpayments to
the plan, the IRS says. The agency says
that, based on comments it received
planadviser.com July-August 2021 | 7
http://www.planadviser.com
PLANADVISER - July/August 2021

Table of Contents for the Digital Edition of PLANADVISER - July/August 2021
