To amend the Internal Revenue Code of 1986 to allow distributions from qualified cash or deferred arrangements in the event that the employer files for chapter 11 bankruptcy and the employee is not regularly scheduled for work or paid.

This bill amends the Internal Revenue Code to permit penalty-free distributions from a tax-preferred pension plan in chapter 11 bankruptcy proceedings on behalf of employees who, at the time of filing of the chapter 11 petition, are not regularly scheduled to work for the number of hours they are customarily scheduled to work or are not paid on or before the time they are customarily paid.