You are here:

Economics/Voluntary Retirement Scheme (VRS).

Advertisement


Question
Dear Prof Dr Michael

http://economictimes.indiatimes.com/definition/voluntary-retirement-scheme
http://www.pbdisinvest.nic.in/pdf/vrs_scheme.pdf
http://business.gov.in/manage_business/vrs.php
http://dpe.nic.in/important_links/dpe_guidelines/voluntary_retirement_scheme
http://www.slideshare.net/AshwiniPise/voluntary-retirement-scheme1


1. Are these schemes provided by both public and private sector companies ?.
2.What are the Business benefits for the cos who are offering VRS Schemes ?.
3.What are the primary reasons for offering these VRS Schemes by cos ?.
4.People who opt for VRS can apply for other job/s in the same industry sector ?. example Banks, Healthcare, Manufacturing etc with the same pay scale,perks and designation which they were working.

Awaiting your reply,

Thanks & Regards,
Prashant S Akerkar

Answer
1) It does appear that both private and public sector companies participate
2) The benefit to businesses is that they save money.  The VRS scheme is used when they have more employees than they need to meet production demands, but since they are unionized the company can't just fire people.  Instead, they offer incentives to people to quite their jobs for an early retirement with a minor pension.
3) It's an incentive to get people to quite their jobs by offering them about about 1/11 of their regular annual wages as a retirement pension.  That way the company saves money by paying people less for work they weren't doing anyway.
4) I don't see anything that says people to opt for VRS can't apply for additional jobs.  The company cannot hire someone new to the same position, but it appears as though employees can take new jobs at other companies.  This would be consistent with standard pension and retirement packages, wherein you can collect retirement from one company and work at another, generating dual-income.

Economics

All Answers


Answers by Expert:


Ask Experts

Volunteer


Michael Taillard

Expertise

Accepts most economic questions

Experience

Consulting with major corporations, government agencies, political organizations, small businesses, non-profits, start-ups, and even individual people. Teaching at universities around the world, and developing original coursework. Performing original research and analysis. Writing books and scientific studies.

Organizations
American Economics Association

Publications
http://www.barnesandnoble.com/s/michael%20taillard You can also check Proquest for a small selection of my research.

Education/Credentials
PhD (Financial Economics; honors) -- MBA (International Business Finance; honors) -- Grad School Certificate (International Business Management; honors) -- BS (International Business Economics; honors) -- AA (Business Administration; honors) -- Certificate (Chinese Language and Culture) -- Trade School (Transportation Logistics; honors)

©2017 About.com. All rights reserved.