Voluntary Retirement Scheme 2023: VRS Benefits, Features & All Details

The Voluntary Retirement scheme was launched on 5th Oct 1988, in which the employee will get a voluntary retirement from the duty, before the date of his/her retirement plan. With the help of this scheme, many of the companies reduce the staff numbers.

This scheme is applicable for both Private and Public working areas. The VRS is also known by the name of ‘Golden Handshake’. The government launched this scheme to solve the problem of staff retrenchment legally. Go through the article, you will get to know about its benefits, and features in detail.

Voluntary Retirement Scheme 2023: VRS Benefits, Features & All Details
Voluntary Retirement Scheme

वीआरएस क्या होता है- वोलंटरी रिटायरमेंट का मतलब

About 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 shakebecause it is beneficial for both the employee or the employer.

Scheme nameVoluntary Retirement Scheme (VRS)
Organized byGoI
Who can take benefit?Employees both private or government
Benefits DetailsGratuity amount, PF, VL encashment, and Transfer benefits
Main purposeManagement of the employee rate in the company
Scheme comes underCentral and State Government
Benefit forIndia based employees
Post Category of the articleScheme or Yojana
Official Web portalClick Here

Objective of VRS

The main purpose of this yojana is to make retrenchment legal. However, from this scheme employer or employee 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 the cost. Some of the main goals of the VRS, which 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 mention 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 the manpower legally,
  • In this intense competition world, it is important for the company to manage the staff, for the growth purpose, and the save money prospecting.
  • After retirement, an employee will get the benefit of some of the compensation of some of the amount which is tax-free.
  • An employee who takes VRS also gets some facilities like rehabilitation, counseling services, etc.

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Key Features of VRS

There are some of the key features of the Voluntary Retirement Scheme which 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, mention 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 a right of the employee.

Standards to Apply for VRS

Forms/ RuleEligibilityMinimum servicesNotice periodAcceptanceNon- 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.
NilThree monthsaccept before the expiry of the notice period.Suspension
FR 56 (m)For Group C: They are not covered under any pension rules.30 yrsthree monthsNot necessaryNil
Pension Rule 48 (1)aAll the Govt. employees incorporated under CCS pension Rule, 197230 yrsthree monthsaccept before the expiry of the notice period.Suspension
Pension Rule 48 (A)All the Govt. employees incorporated under CCS pension Rule, 197220 yrsthree monthsaccept before the expiry of the notice period.Any Ground

How to Apply for 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 to 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, multiple the retirement salary to the days left of the actual retirement.

Why VRS offered by Employer

Both the Private and the Government sector, the VRS can be followed in one of the following reasons which are mention below:

  • At the time of the Recession,
  • When competition is high,
  • Foreign collaboration
  • Mergers of the companies
  • take over of 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 by their growth rate in the company

Reason for Accepting VRS by Employee

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

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

Important Links

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

Voluntary Retirement Scheme FAQs-

Is I will get a pension if I will take VRS?

The employee will get the benefit not only 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 rest of the months left for your actual retirement.

Is gratuity under VRS amount is tax-free?

Yes, but there is some limit, after that, you have to pay tax.

What does tax-free salary mean?

Tax-free is that salary in which an employer has to pay the employee salary tax.

What is the age criteria for the VRS?

For the VRS, the age of the candidate should be above 40.

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