Voluntary Retirement Scheme 2022 – Benefits, Features

Dear Readers in this Article we will talk about, Voluntary Retirement Scheme 2022 – Benefits, Features. The voluntary retirement scheme is one of these measures which is used by companies in order to reduce the strength of their company’s employees.

The VRS is also known by the name of ‘Golden Handshake’. The government launched this scheme to solve the problem of staff retrenchment legally. Voluntary Retirement Scheme is followed by both the Private and the Government working sectors.

Voluntary Retirement Scheme 2022, 

Through voluntary retirement, the strength of the company’s employees is reduced so that the company will be able to reduce the overall freight of the firm.

voluntary retirement scheme

whereby an employee is offered to voluntarily retire from services before the retirement date. Voluntary retirement scheme is a method used by companies to reduce surplus staff. Under this scheme, there are many benefits that are also offered to the Employees like rehabilitation facilities to staff, advice on managing funds, etc

Voluntary Retirement Scheme 2022 Main Point Highlights:

Name of scheme Voluntary retirement scheme
Launched by Government of India
Beneficiary Companies

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.

Benefits Of this Scheme

  • It must be kept in mind that voluntary retirement is not a kind of forced retirement. It’s totally in the hands of the employees to leave the job or to keep the job, the decision is up to them only.
  • Another notable point is that a voluntary retirement scheme is applicable to only those employees who have completed 10 years of their service or who are above the age of 40 years.
  • This scheme is offered by both public and private sector companies.
  • This scheme is also going by the name of a “golden handshake”
  • 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,
  • This scheme is applied to those employees that have completed 10 years of service or above the age of 40 years
  • The retiring employees is also offered compensation which is tax-free up to a certain amount

Voluntary Retirement Scheme calculation

  • 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.

Important points

  • Once the VRS is approved by the authorities, it cannot be withdrawn.
  • The vacancy caused due to voluntary retirement is cancelled.
  • The employees who have opted for VRS cannot be re-appointed by the state government or Public Sector Units of the state.
  • The benefits must be paid to the employee within sixty days of his/her acceptance of voluntary retirement.
  • If the employee is under any criminal or legal proceedings for recovery of any amount

Eligibility Criteria

  • The applicant’s age should be at least 40 years old
  • Applicant must be working with the company for at least 10 years
  • Only the employees of the company can be able to take the benefit of this scheme

How to Apply for Voluntary Retirement Scheme

  • The eligible employees who desire to seek Voluntary Retirement may apply to the competent authority through his/her Head of the Dept. in the prescribed format.
  • The decision of the competent authority regarding the acceptance/rejection of the VR application shall be communicated to the employee within 30 (thirty) days of submission of the application.

voluntary retirement scheme

Voluntary Retirement Scheme FAQs

What is the rule for voluntary retirement?

VRS applies to employees who have completed 10 years of service or are above the age of 40 years. It applies to workers, executives of companies and/or to an authority of a co-operative society (except company/co-operative society directors).

How can I get VRS in govt job?

all employees on completion of 30 years qualifying service can take voluntary retirement by giving 3 months notice. Group A & B Officers who had entered service before the age of 35 years have the right to retire after attaining the age of 50 years by giving a similar notice.

How much money will I get after VRS?

The compensation paid under VRS is income tax-free up to Rs. 5 lakhs under section 10 (10C) of the Income Tax Act. You must claim it in the same assessment year as that of receiving compensation.

What is the golden handshake scheme?

A golden handshake is a stipulation in an employment agreement that states that the employer will provide a significant severance package if the employee loses their job.

See also – 

SSPMIS Payment Status 2022

Conclusion

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