Voluntary Retirement Scheme, Benefits of VRS Apply Online, Eligibility and Last Date: Today’s world is very different than before. Retirement which was often associated with aging and poor health is now being pursued by people in their 40s. More and more people are now thinking of taking Voluntary Retirement Plan as companies offer it to employees to reduce overall force, save cost and improve productivity.
There are many instances in which companies feel the need to reduce the number of employees. For this, the company takes various measures. One of these measures is the Voluntary Retirement Scheme. Today through this article we are going to give you all the important information about this scheme like what is Voluntary Retirement Scheme. Its purpose, benefits, features, need process, etc.
Voluntary Retirement Scheme
- 1 Voluntary Retirement Scheme
- 2 Objective Of Voluntary Retirement Scheme
The retirement age is generally considered to be 60 years. When a person crosses this milestone, they can retire from work obligations and spend the golden years of retirement pursuing their hobbies and interests. However, in the case of voluntary retirement, a person retires in his 40s or 50s. So if you are interested to know each and every detail about Voluntary Retirement then you must read this article very carefully till the end. Voluntary retirement plans are used by organizations as a way to cut down on the workforce. It is also known as the golden handshake and is an amicable way for companies to let go of some of their employees.
Many large private and public sector enterprises take to support this scheme. However, to ensure that no company misuses it, the Industrial Disputes Act of 1947 mandates certain conditions that all organizations must comply with under Voluntary Retirement Scheme. It is important to note that even though the method is used as a way to reduce the workforce, this plan differs from a regular layoff. The final decision to opt for voluntary retirement rests with the employee. An employee who has worked with a company for at least 10 years and is above 40 years of age can also apply for VRS. If you are interested in getting each and every detail about Voluntary Retirement then you must read this article very carefully till the end.
Voluntary Retirement Scheme – Highlights
|Name of scheme||Voluntary Retirement Scheme|
|Launched by||Government of India|
|Objective||To reduce the strength of employees in a company|
Benefits And Features Of the Voluntary Retirement Scheme
- Under the scheme, voluntary retirement from services is offered to the employees
- This retirement is before the date of retirement
- It should be noted that voluntary retirement is not a type of forced retirement. It is completely in the hands of the employees to leave or stay in the job
- It is to be noted that the Voluntary Retirement Scheme is applicable only to those employees who have completed 10 years of service or are above 40 years of age.
- This scheme is offered by both public and private sector companies
- This scheme is also known as Golden Handshake
- The strength is reduced through the voluntary retirement of employees to reduce the cost of the firm.
- The person taking voluntary retirement is not allowed to apply to any other firm belonging to the same industry
- The scheme is applicable to employees who have completed 10 years of service or are above 40 years of age
- The person taking voluntary retirement is offered various benefits by the company like rehabilitation facilities, counseling, etc.
- Retiring employees are also offered compensation which is tax-free up to a certain amount.
- Employees will be provided provident fund and gratuity dues at the time of retirement
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Objective Of Voluntary Retirement Scheme
The number of employees is reduced through voluntary retirement so that the company can reduce the overall cost of the firm. There are many rules and regulations under voluntary retirement. One of the most basic rules is that the employee who is retiring should not apply to any other firm belonging to the same industry.
The main objective of this scheme is to reduce the number of employees in such a company that is not able to pay the employees due to financial problems. The company can reduce the cost by giving voluntary retirement. Under this scheme, many benefits are also provided to the employees like rehabilitation facilities to the employees, advice on money management, etc. which will automatically improve their income.
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Situations in which Voluntary Retirement Scheme is adopted
- Obsolescence Of Product Or Technology
- Acquisitions And Mergers
- Joint Venture With Foreign Collaboration
- Recession In Business
- Intense Competition
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Benefits to employees opting for Voluntary Retirement Scheme
- The employee will get 45 days’ pay for each completed year of service or monthly emoluments at the time of retirement multiplied by the remaining months of service before the normal date of service, whichever is less.
- The employee will also get provident fund and gratuity dues
- The compensation received at the time of voluntary retirement is tax-free up to a specified amount
- Companies also provide benefits packages to employees who opt for voluntary retirement
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VRS Eligibility Criteria Under the Retirement Scheme
- Applicant must be at least 40 years old
- Applicant should be working with the company for at least 10 years
- Only the employees of the company will be able to take advantage of this scheme. The only exceptions are directors of companies or a cooperative society.
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