Retirement savings likely to be released

The American Society of Pension Professionals and Actuaries (ASPPA) reports it has been working with Congress and the IRS on ways to let hurricane victims draw on their retirement savings without penalty. (Noted as relevant here because it's a way to pay for housing.) A release from ASPPA today says:

The new IRS guidance, also expected to be issued tomorrow, allows workers to immediately take hardship withdrawal distributions or loans from their 401(k)-type plans, even where currently not allowable under the plan. The IRS would also expedite loan requests by reducing the paperwork normally required to borrow from a 401(k)-type plan.

Additionally they expect a Senate Finance Committee proposal to be introduced tomorrow that

would waive the 10 percent penalty for early withdrawals, as well as allow a participant to pay tax on the distribution over a 3-year period. Such hardship withdrawals could later be contributed back to the plan within a 3-year period.

The legislative package would suspend any payments due on existing loans for up to a year, and allow participants to borrow (up to a maximum of $100,000) of their account balance. The package would also extend all plan filing and funding deadlines for a minimum of six months, with a provision for further extensions.