Bipartisan Senate legislation introduced today would limit how often Americans could borrow from their 401(k) plans but increase the repayment period after leaving a job.

The sponsors said the retirement accounts were increasingly being used as rainy-day "piggy banks" and not being repaid, contributing to a $6.6 trillion gap between what Americans have saved and what they will need for retirement.

The bill, sponsored by retiring Sen. Herb Kohl, D-Wis., and Sen. Mike Enzi, R-Wyo., seeks to reduce so-called leakage -- when account holders cannot repay the money they borrowed from their 401(k)s.

"While having access to a loan in an emergency is an important feature for many participants, a 401(k) savings account should not be used as a piggy bank," Kohl said in a joint news release. He chairs the Senate Special Committee on Aging. Enzi is the ranking Republican.

The Savings Enhancement by Alleviating Leakage in 401(k) Savings Act of 2011 -- SEAL Act, for short -- would:

* Reduce to three the number of loans that participants can take at one time. * Extend the rollover period for repayment after leaving a job. * Allow 401(k) participants to continue to make elective contributions during the six months after a hardship withdrawal. * Ban products that promote "leakage," such as the 401(k) debit card.

Read the full text of the bill (pdf).

Bloomberg reports on a study released today showing that at the end of last year a record number of 401(k)-type participants had an outstanding loan -- 28% -- with an average outstanding loan balance of $7,860. The study of 110 plans found that 58% permitted two or more loans at a time.