Table of Contents

 About Voluntary Retirement Scheme

o Objective of VRS
o Benefits of VRS
 Key Features of VRS
o Standards to Apply for VRS
 How to Apply for Voluntary Retirement Scheme
o Voluntary Retirement Scheme calculation
o Why VRS offered by Employer
o Why VRS offered by Employee
o Reason for Accepting VRS by Employee
 Voluntary Retirement Scheme: FAQs

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 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 governement

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 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 they 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 VRS
There are some of the benefit, which 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/ Minimum Notice Non-
Eligibility Acceptance
Rule services period Acceptance

FR 56 (k) For Group A and B Nil Three accept before Suspension

 candidates:- Entry in
service must be before
35, or the attainment
the expiry of
year should be 50
months the notice
years.
period.
For Other cases:-
Must attain 55 yrs of
age.

For Group C: They

FR 56 three
are not covered under 30 yrs Not necessary Nil
(m) months
any pension rules.

All the Govt. accept before

Pension
employees incorporated three the expiry of
Rule 48 30 yrs Suspension
under CCS pension months the notice
(1)a
Rule, 1972 period.

All the Govt. accept before

Pension
employees incorporated three the expiry of
Rule 48 20 yrs Any Ground
under CCS pension months the notice
(A)
Rule, 1972 period.

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.

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 ae given below:

 No Job Satisfaction,
 Health Issues of the employee,
 Due to financial reasons,
 Got better Job or career opportunity,
Voluntary Retirement Scheme: FAQs
Is I will get the 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 to 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 means?

Tax free is that salary in which an employer have 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.