Senator, Herb Kohl, Chairman of the Senate Special Committee on Aging, and Senator, Mike Enzi, have proposed legislation to limit the amount of loans 401(k) participants can take from their plans, Pensions & Investments reports. The bill will limit the number of outstanding loans for each participant to three.
The bill will allow participants, who have lost their job, to pay down the loans through contributions into an IRA, helping to limit their tax liabilities. The bill will also let savers contribute to their plan after taking a hardship withdrawal. The bill will prohibit products that promote leakage of savings, including 401(k) debit cards, adds Bloomberg.
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