Definition of Voluntary Retirement Scheme
Voluntary retirement schemes are forms of early retirement that are initiated by employers. Comprehensive and generous compensation packages may be offered to downsize a company's number of employees or reorganize a labor force.
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What Is It?
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A voluntary retirement scheme (VRS) is a package offered to certain employees as an incentive to retire. It usually contains generous benefits and is typically targeted at employees in middle age and/ or those who have been with a company for a considerable amount of time (e.g., ten years). Such benefits often include tax-free severance. This severance may be so expensive that it causes companies to reconsider the value of a VRS.
Why a VRS?
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The chief goal of a VRS is to downsize the number of employees on a given payroll. This is why we frequently see regulations stating that vacancies created by a VRS are not to be filled. In this way, a VRS cannot be used to replace one employee or worker with another.
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Issues
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A VRS can be an attractive option for those nearing retirement age and those who do not have dependent children. Having dependents, especially those who need a college education, makes living on a future fixed income less tenable. Also, on occasion, executives or management have not been bound by the same VRS practices as employees with lower positions or pay. This practice has led to controversy regarding equality among employees.
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References
- Photo Credit Retired senior man fishing in golden sunset image by Pezography from Fotolia.com
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Comments
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if any one takes vrs when can I get my all money. I have heard that after giving vrs the person gets money after 2 months from the date of vrs sanctioned. Please reply me immediately its very serious matter.
