Voluntary Retirement Scheme (VRS) for the Public Sector Employees

Contents

Overview
Objective
Operation of the Scheme
Eligibility for the Scheme
Ex-Gratia Amount
Payment Mode
Terms and Conditions
Frequently Asked Questions

Overview

Voluntary Retirement Schemes are used by firms and organizations to reduce excess staff. This plan is regulating in India. However, the labour laws of the country don't permit the downsizing of the unionized employees.

Employees who are 40 years or older and have completed at least ten years of employment are qualified for this scheme. The Scheme applies to all the executives, workers, employees, authorities, expecting directors, etc. of the company.

The Voluntary Retirement for the Employees of Public Sector Undertakings might also be called the Punjab State Public Sector Undertakings Voluntary Retirement Scheme. The Scheme is for all the PSUs- Public Sector Undertakings and the Cooperative Institutions of State of Punjab. This plan applies to all the PSU's subsidiaries, known as firms with an equity rate of more than 50% held by the Government.

Objective

To accomplish the most favourable utilization of human resources. To upgrade the return for investment in the PSUs.
While implementing the Scheme, the management must ensure that the plan is expanded mainly for the employees who are not essential and not any loss for the company.
The highly qualified and skilled employees are not eligible for this scheme.
There will be no enrolment for the vacant positions due to VRS in the company, as the firm needs to be not shed the talent.

Operation of the Scheme

The Scheme will operate for six months from the issue date of the notification provided by the Government. The Government might stretch the tenure for the Scheme from time to time. If the Public Sector Undertakings don't need any monetary or outside support for implementing the plan, the operations will be done by the Administrative Department's Directors. However, if the PSU needs any financial and external aid, then the Finance Department will regulate the plan, and they will approve according to the Board of Directors from the Administrative Department.

Eligibility for the Scheme

All the individuals working as a regular or permanent employee under the weekly authorized ranked post of PSUs are qualified to obtain the Voluntary Retirement scheme. They must have fulfilled service for five years and possess the remaining service period of a minimum of five years before the actual retirement. But, these following individuals are not eligible for this scheme according to the PSUs:

Select employees that have performed employment bonds, and they haven't fulfilled the agreed period, as mentioned in the bond.
The employees who are working outside the country with individual bonds and arrangements.
The employees who are selected based on the contract.
The PSUs can also bar any other individuals who belong to different categories according to their rules and regulations.

Ex-Gratia Amount

The individual taking Voluntary Retirement will be allowed for the compensation containing the total salary of thirty-five days of each fulfilled year of employment and twenty-five days of each year for the number of jobs left until the subsidy. The reimbursement will be focused on the least amount of VRS scheme, i.e., INR 25000 or salary of two fifty days either one of them is higher. But the compensation must not go beyond 80% of the total amount of the wage that the individual will withdraw at the current level for balancing the time left before superannuation. If the retirement pension scheme regulates the employee, the payment must start from the next month to the day the employee would have retired in the ordinary course.

Payment Mode

The whole amount of allocated ex-gratia to the employee for choosing the Voluntary Retirement scheme will be payable in cash under sixty days from the day of the individual's relieving.

Terms and Conditions

Arrears of salary for the standard revision of payment etc. will not be integrated with calculating the suitable amount.
Only fulfilled service years will be considered for incoming for the least satisfactory service.
The refund will be estimated based on the previous payment withdrawn by the officer or employee.
The employees are not allowed to draw the requested amount under the Scheme that has been approved by the Competent Authority.
The payments under this scheme are subject to a tax deduction as per the 1961 Income Tax act.
The vacant spot after the voluntary retirement will not be fulfilled.
The Government has the right to suspend and cancel the scheme according to their decisions.
All the payable amounts for this scheme, along with the benefits, will be provided to the individual taking Voluntary Retirement.
If the employee dies after accepting the VRS, then the nominated person will get the payable amount on behalf of the deceased.

You will be able to learn more about this scheme on the official website.

Frequently Asked Questions

Q. What is the VRS scheme?

Q. What is the VRS scheme by Public Sector Undertakings?

The Voluntary Retirement for the Employees of Public Sector Undertakings might also be called the Punjab State Public Sector Undertakings Voluntary Retirement Scheme. The scheme is for all the PSUs - Public Sector Undertakings along with the Cooperative Institutions of State of Punjab

Q. What is the general election for any VRS scheme?

Employees who are of 40 years or older and have completed at least ten years of employment are qualified for this scheme. The Scheme applies to all the executives, workers, employees, authorities, expectant directors, etc. of the company.

Q. What is the objective of the scheme?

The primary objective of the schemes are o accomplish the most favourable utilization of the human resource and upgrade the return for investment in the PSUs.

Q. What is the payment mode of the scheme?