Proposed bill designed to slow 401(k) fund leakage

Last month, a bill was introduced in the U.S. Senate that would: --Allow workers more time to repay loans if they lose their job. Currently repayment must occur within 60 or 90 days, depending on the plan. The new law would extend that repayment period until tax filing deadline -- April 15 of the next year. -- Allow a worker taking a hardship withdrawal to continue making contributions. Currently, a worker taking a withdrawal cannot continue to contribute for at least six months. --Restrict the number of loans a worker can have outstanding at one time to three. --Bans the use of debit cards tied to a 401(k) account. Although it's not a common practice, some plans have allowed workers to tap into funds by using a debit card. The bill was referred to the Senate Finance Committee on May 18. No date has yet been set for discussion, said Joe Bonfiglio, a spokesman for the Senate Special Committee on Aging, which Kohl chairs. Published: Mon, Jun 13, 2011