To amend the Internal Revenue Code of 1986 to permit the tax-free rollover of certain payments made by employers to separated employees.

Amends the Internal Revenue Code to exclude from gross income qualified separation payments transferred to individual retirement accounts. Describes such payments as qualified if: (1) such payments were voluntarily paid by the employer on account of separation before attainment of normal retirement age; and (2) such separation was in connection with a substantial reduction in the employer's work force.