What Is a Voluntary Retirement Scheme?

What Is VRS?

How Does a Voluntary Retirement Scheme Work in India?

What Are the Eligibility Criteria for VRS?

What Are the Mandatory Rules of Voluntary Retirement Schemes?

What Are the Basic Features of the Voluntary Retirement Scheme?

What Are the Differences Between VRS and Normal Retirement?

Some differences between VRS and normal retirement are as follows:

Voluntary Retirement Scheme

Normal Retirement

An individual needs to be between the age of 40- 50 years.

Individuals should be between the age limit of 60-70 years.

Employees have to work at the company for a minimum of 10 years.

There are no criteria for completing specific years of service in the company.

Employees will only get 50% of their remunerations or the average remuneration.

If the employee is eligible for a pension, they will receive the total amount of promised remuneration.

A voluntary retirement scheme is one of the most humane ways to let off employees who have served the company for a considerable time. Both public and private companies offer this option for their hardworking and loyal employees. However, it is not mandatory, and employees can avoid it.

FAQs about Voluntary Retirement Scheme

When can companies offer voluntary retirement schemes? up-arrow

Companies can offer voluntary retirement schemes to their employees under the following circumstances:

  • Obsolescence of product or technology that the organisation was using or manufacturing
  • Recession in the country’s economy
  • Rise of competition within the organisation
  • Another organisation has taken over the company, or it has merged with another company

What are the benefits of voluntary retirement schemes? up-arrow

Since the process of VRS is transparent and the employee has voluntarily accepted the terms and conditions, trade unions will not be able to make any objections. Also, employees can receive substantial compensation from the organisation. They can use this money to start a small business or pursue their hobbies and passions.