Voluntary Retirement Scheme 2024: The Voluntary Retirement Scheme (VRS) was launched on 5th Oct 1988, during which the worker will get a voluntary retirement from duty, before the date of his/her pension plan. With the assistance of this scheme, many of businesses reduce their staff numbers. The scheme has been implemented for all private and public sectors. The VRS is additionally known by the name of ‘Golden Handshake’. the govt launched this scheme to unravel the matter of staff retrenchment legally. undergo the article, you’ll get to understand its benefits, and features intimately.
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| Voluntary Retirement Scheme (VRS) |
What is Voluntary Retirement Scheme
The VRS was famous by the name of ‘early retirement buyout’ because the worker takes the retirement before the superannuation, or it’s also called a ‘golden shake‘ because it’s beneficial for both the worker or the employer.
| Scheme name | Voluntary Retirement Scheme (VRS) |
| Organized by | GoI |
| Who can take benefit? | Employees both private or government |
| Benefits Details | Gratuity amount, PF, VL encashment, and Transfer benefits |
| Main purpose | Management of the employee rate in the company |
| Scheme comes under | Central and State Government |
| Benefit for | India based employees |
| Post Category of article | Scheme or Yojana |
| Official Web portal | Not released |
Objective of VRS
The main purpose of this yojana is to form a retrenchment legal. There will be no loss to the employer or employee for this scheme.. the worker won’t suffer from any financial issues after retirement, as if they’re going to get the PF, gratuity, or any other benefits also. The VRS is additionally beneficial for the corporate, as they will reduce the value. a number of the most goals of the VRS, which are as follows:
- Good management strategy of the employed management.
- Worthy return on Investment of PSU employees.
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Benefits of VRS
There are a number of the benefit, which are mention within the below section:
- If the worker gets retirement under the VRS, they’re going to get the advantage of the VL encashment, Providential Fund, the advantage of transfer, and Gratuity,
- It is a humane technique, which is employed to decrease the manpower legally,
- In this intense competition world, it’s important for the corporate to manage the staff, for the expansion purpose, and therefore the economize prospecting.
- After retirement, an employee will get the advantage of a number of the compensation of a number of the quantity which is tax-free.
- The employee who takes VRS also gets facilities like rehabilitation, counseling services, etc.
Key Features of VRS
There are a number of the key features of the Voluntary Retirement Scheme which you ought to remember, read all the features of the VRS. Before applying for retirement, all the workers must undergo its key features, mention within the below blocks:
- The employee who takes VRS also gets facilities like rehabilitation, counseling services, etc.
- This scheme is merely for those employees, whose age is quite 40 years, or completed a minimum of 10 years of the services.
- The scheme covered both the private and therefore the government sectors.
- The VRS is additionally beneficial for the corporate, it reduces the utilization cost, and increase the management of the worker within the companies.
- The candidate who gives VR isn’t allowed to hitch another firm with an equivalent sort of sector.
- VRS isn’t a right of the worker.
Standards to Apply for VRS
| Forms/ Rule | Eligibility | Minimum services | Notice period | Acceptance | Non- Acceptance |
| FR 56 (k) | For Group A and B candidates:- Entry in service must be before 35, or the attainment year should be 50 years. For Other cases:- Must attain 55 yrs of age. |
Nil | Three months | accept before the expiry of the notice period. | Suspension |
| FR 56 (m) | For Group C: They are not covered under any pension rules. | 30 yrs | three months | Not necessary | Nil |
| Pension Rule 48 (1)a | All the Govt. employees incorporated under CCS pension Rule, 1972 | 30 yrs | three months | accept before the expiry of the notice period. | Suspension |
| Pension Rule 48 (A) | All the Govt. employees incorporated under CCS pension Rule, 1972 | 20 yrs | three months | accept before the expiry of the notice period. | Any Ground |
How to Apply for Voluntary Retirement Scheme
If you would like a Voluntary Retirement, so you’ve got to travel to the concerned authority of the corporate , i.e. Head of the Department. the choice of the VR application is at the hand of the top of the Department, whether he accepts it or rejects it. The head will communicate to the worker, after the submission of the VR form.
Voluntary Retirement Scheme calculation
By using the below method you’ll calculate the VRS of your salary:
- The VRS is often calculated on the idea of the last withdrawal salary.
- The three-month salary is adequate to the VRS amount of each completed service year.
- You can calculate it y another method also, multiple the retirement salary to the times left of the particular retirement.
Why VRS offered by Employer
Both the Private and therefore the Government sector, the VRS are often followed in one among the subsequent reasons which are mention below:
- At the time of the Recession,
- When competition is high,
- Foreign collaboration
- Mergers of the Comepanies
- take over of the Company
- When an employee not updating their knowledge about technology or the merchandise.
Why VRS offered by Employee
- Employees invite VRS probably once they want to career change, or they need some good career change opportunity.
- When Employees are satisfied by their rate of growth within the company
Reason for Accepting VRS by Employee
The employees accept the VRS, probably one among the subsequent reasons, which are given below:
- No Job Satisfaction,
- Health problems with the worker,
- Due to financial reasons,
- Got better Job or career opportunity,
Voluntary Retirement Scheme: FAQs
Is I will be able to get a pension if I will be able to take VRS?
The employee will get the benefit not just for pension, but also took the advantage of gratuity or PF.
How I can calculate VRS?
You can calculate the VRS by multiplied the salary by the remainder of the months left for your actual retirement.
Is gratuity under VRS amount is tax-free?
Yes, but there’s some limit, then you’ve got to pay tax.
What does a tax-free salary mean?
Tax-free is that salary during which an employer needs to pay the worker salary tax.
What are the age criteria for the VRS?
For VRS, the age of the candidate must be above 40