About the Voluntary Retirement Scheme

The VRS was famous by the name of ‘early retirement buyout’ because the employee takes the retirement before the superannuation, or it is also called a ‘golden shake‘ because it is beneficial for both the employee 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 the article	Scheme or Yojana
Official Web portal	Click Here

Objective of VRS

The main purpose of this yojana is to make retrenchment legal. However, from this scheme employers or employees won’t get any losses. The employee will not suffer from any financial issues after retirement, as if they will get the PF, gratuity, or many other benefits as well. The VRS is also beneficial for the company, as it can reduce cost. Some of the main goals of the VRS, are as follows:

• Good management strategy of the employed management.
• Worthy return on Investment of PSU employees.

Benefits of Voluntary Retirement

There are some of the benefits are mentioned in the below section:

• If the employee gets retirement under the VRS, they will get the benefit of the VL encashment, Providential Fund, the benefit of transfer, and Gratuity,
• It is a humane technique, which is used to decrease manpower legally,
• In this intensely competitive world, it is important for the company to manage the staff, for growth purposes, and save money on prospecting.
• After retirement, an employee will get the benefit of some of the compensation amount which is tax-free.
• An employee who takes VRS also gets some facilities like rehabilitation, counseling services, etc.

Key Features of VRS

There are some of the key features of the Voluntary Retirement Scheme that you should be aware of, read all the features of the VRS. Before applying for retirement, all the employees must go through its key features, mentioned in the below blocks:

• The employee can take retirement before the date of the retirement date, there are some terms and conditions are applicable.
• This scheme is only for those employees, whose age is more than 40 years, or completed at least 10 years of the services.
• The scheme covered both the private and the government sectors.
• The VRS is also beneficial for the company, it reduces the employment cost, and increase the management of the employee in the companies.
• The candidate who gives VR is not allowed to join another firm with the same type of sector.
• VRS is not the right of the employee.

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 a Voluntary Retirement Scheme

If you want a Voluntary Retirement, so you have to go to the concerned authority of the company, i.e. Head of the Department. The decision of the VR application is at the hand of the Head of the Department, whether he accepts it or rejects it. The Department Head will communicate with the employee, after the submission of the VR application form.

For more information, check dpe.gov.in

Voluntary Retirement Scheme calculation

By using the below method you can calculate the VRS of your salary:

• The VRS can be calculated on the basis of the last withdrawal salary.
• The three-month salary is equal to the VRS amount of every completed service year.
• You can calculate it y another method as well, multiply the retirement salary by the days left of the actual retirement.

Why VRS offered by Employer

In both the Private and the Government sectors, the VRS can be followed in one of the following reasons which are mentioned below:

• At the time of the Recession,
• When competition is high,
• Foreign collaboration
• Mergers of the companies
• take over the company,
• When an employee not updating their knowledge about technology or the product.

Why VRS offered by Employee

• Employees ask for VRS probably when they want to career change, or they have some good career change opportunity.
• When Employees are satisfied with their growth rate in the company

Reason for Accepting VRS by Employee

The employees accept the VRS, probably for one of the following reasons, which are given below:

• No Job Satisfaction,
• Health Issues of the employee,
• Due to financial reasons,
• Got a better Job or career opportunity,

Important Links

Department of Public Enterprises	dpe.gov.in
Information Page for VRS	Click Here
Guidelines for Voluntary Retirement Scheme or VRS	Click Here
FAQs on VRS	Click Here

Voluntary Retirement Scheme FAQs