A bipartisan pair of lawmakers have introduced legislation that would make it easier for workers to repay loans or withdrawals they take from their employer-sponsored 401(k) plan, drawing praise from a leading trade group representing retirement-plan advisors.
The Shrinking Emergency Account Losses (SEAL) Act, authored by Sens. Bill Nelson (D-Fla.) and Mike Enzi (R-Wyo.), would extend the grace period to avoid penalties for repaying loans or withdrawals from a plan when a worker leaves a job. Under current law, former employees have up to 60 days to replenish their account before incurring a penalty. The SEAL Act would extend that to the next date the worker files federal income taxes.
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