Definition of voluntary retirement scheme (VRS)

Voluntary retirement scheme (VRS) refers to voluntary retirement scheme, when company faces the problem of surplus labor, they have to remove the extra workers. This needs to be done to avoid increase in cost. One of the methods used by the companies is the methods used by companies is the VRS scheme. Under this scheme people have put in 20 or more number of years of service are given an option to opt for early retirement benefits and some other amount which is due to them are paid when they leave the company.

Voluntary retirement programs offer employees an incentive to commit to employment with their employer for a significant number of years. Voluntary retirement programs can also provide employees with an option to retire before the minimum age of a government pension scheme.

It is an 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.

Definition of voluntary retirement scheme (VRS)